University of Michigan Consumer Sentiment Archives - Shopfloor

University of Michigan: Political Uncertainty Pushed Confidence Lower in October

By | Economy, Shopfloor Economics | No Comments

The two measures of consumer confidence have diverged recently. The Conference Board’s survey jumped strongly in September, rising to its highest level in nearly eight years. Meanwhile, the competing survey from the University of Michigan and Thomson Reuters, out today, fell from 91.2 in September to 87.9 in October, its lowest level in 12 months. As noted by Richard Curtin, the survey’s Chief Economist, “The early October loss was concentrated among households with incomes below $75,000, whose Index fell to its lowest level since August of 2014. In contrast, confidence among upper income households remained unchanged in early October from last month….” He submits that political uncertainties surrounding the upcoming election have diminished sentiment in October. Read More

Consumer Confidence Fell to a 12-Month Low in September

By | General | No Comments

The University of Michigan and Thomson Reuters said that consumer confidence fell to a 12-month low in September, according to preliminary numbers. The Consumer Sentiment Index declined from 91.9 in August to 85.7 in September, with worries about the U.S. and global economy likely weighing heavily on Americans’ minds. Indeed, the decrease in perceptions was perhaps influenced by the falling stock market values and the media focus on economic headwinds. This was most noticeable in the subcomponent measuring future conditions, which declined from 83.4 to 76.4, the lowest level year-to-date. The index examining the current economic environment was also lower, down from 105.1 to 100.3, decreasing for the third straight month. Read More

University of Michigan: Consumer Sentiment Declined Unexpectedly Again in March

By | General | No Comments

The University of Michigan and Thomson Reuters said that consumer confidence unexpectedly slipped for the second straight month. The Consumer Sentiment Index has dropped from 98.1 in January to a revised 95.4 in February to 91.2 in March, according to preliminary data. The January figure had been the highest level in 11 years. Americans continue to be more positive today than one year ago, with the index measuring 80.0 in March 2014, and as such, the longer-term trend remains positive.

However, these data also suggest that the public remains anxious, mirroring the caution seen in recent retail sales data. The University of Michigan survey indicates some easing in both current and expected measures over the past two months. Final data will be released on March 27.

Chad Moutray is the chief economist, National Association of Manufacturers. 

University of Michigan: Consumer Confidence at Highest Point Since July 2007

By | Economy | No Comments

The University of Michigan and Thomson Reuters said that consumer confidence rose to its highest level since July 2007. Preliminary Consumer Sentiment Index data increased from 86.9 in October to 89.4 in November. This reflects continued improvement in Americans’ perceptions about the U.S. economy, with the headline figure rising from 75.1 in November 2013 (in the aftermath of the budget shutdown). Moreover, it mirrors similar data from the Conference Board, which also has reached a pre-recessionary high of late. Read More

University of Michigan: Consumer Confidence Has Risen Somewhat in September

By | Economy | No Comments

The University of Michigan and Thomson Reuters said that preliminary data on consumer confidence reflects a slight increase in September. The Consumer Sentiment Index increased from 82.5 in August to 84.6 in September, its highest level since July 2013. These figures suggest that the lull in confidence that we have seen so far this year might finally be starting to dissipate. Prior to the September reading, for instance, the University of Michigan index has averaged just 81.9, and it was little changed since recovering from the budget showdown last fall. In contrast, the Conference Board’s confidence measure has reached pre-recessionary highs in its most recent report.

The subcomponents in the University of Michigan data continue to reflect some anxieties on the part of the consumer. For instance, the index for the current economic environment slipped a bit this month, down from 99.8 to 98.5, even as it represents an improvement from earlier in the year. Americans remain concerned about labor market and income growth, and this is likely responsible for the decline in the present figure. Geopolitical events might also play into this. Still, the future-oriented index rose strongly, up from 71.3 to 75.6, its highest level in over one year, suggesting more optimism moving forward.

We will get final data on September consumer sentiment from the University of Michigan on September 26. The Conference Board will also release its survey data on consumer confidence on September 30.

Chad Moutray is the chief economist, National Association of Manufacturers. 

University of Michigan: Consumer Confidence Slipped Somewhat in July

By | Economy | No Comments

The University of Michigan and Thomson Reuters said that preliminary data on consumer confidence slipped somewhat in July. The Consumer Sentiment Index unexpectedly decreased from 82.5 in June to 81.3 in July. The consensus expectation had been for a slight gain. Over the course of the last eight months (December to July), the index has averaged 81.8. In essence, after consumer attitudes recovered from the government shutdown in December, they have not really moved that much. The April reading of 84.1 is the one outlier in that time frame.

Looking specifically at the July data, it is clear that the drop in consumer sentiment in the month stemmed from weaker expectations about the future economy. The forward-looking component has declined from 74.7 in April to 71.1 in July. In contrast, views about the current economic environment were more mixed, with an improvement in July (up from 96.6 to 97.1) but with slightly weaker perceptions than seen in April (98.7).

This nuanced perception could be influenced by the competing news about the health of the U.S. economy, with disappointing data on real GDP growth in the first quarter perhaps outweighing better labor market headlines of late. Either way, it suggests that consumers continue to remain cautious.

We will get final data on July consumer sentiment from the University of Michigan on August 1. The Conference Board will also release its June survey data on consumer confidence on July 29.

Chad Moutray is the chief economist, National Association of Manufacturers. 

Monday Economic Report – February 18, 2014

By | Economy | No Comments

Here is the summary for this week’s Monday Economic Report:

A perfectly timed winter storm at the end of last week coincided with news that cold weather has had a negative impact on consumer spending and manufacturing output. Manufacturing production declined 0.8 percent in January, ending five straight months of expanding activity. Poor weather conditions closed some facilities and hampered shipments. Capacity utilization also decreased, down from 76.7 percent in December to 76.0 percent in January. That was the lowest utilization level since July. Yet, to the extent that weather contributed to the fall in manufacturing output, I would expect production to rebound in the coming months. After all, manufacturing production increased 3.0 percent in the second half of 2013, and manufacturers continue to be mostly upbeat about demand for 2014.

Nonetheless, we saw the effects of the weather in other indicators released last week as well. Retail sales fell 0.4 percent in January, extending December’s 0.1 percent decline. Reduced auto sales were a major factor in this decrease, with motor vehicle purchases down 1.8 percent in December and 2.1 percent in January. If you exclude autos from the analysis, retail spending was unchanged.

Although the University of Michigan and Thomson Reuters consumer sentiment measure was unchanged in February, respondents’ view of the current economy has slipped since December. One might surmise that weather impacted labor markets and incomes, lessening current confidence. However, Americans seem more optimistic about the future, with the expectations component rising from 71.2 in January to 73.0 in February.

There were signs that the U.S. economy’s recent improvements continue to bear fruit. Small business leaders have become more confident, with the National Federation of Independent Business’s Small Business Optimism Index edging higher for the third straight month, and January’s data also show an increased willingness to add workers. The net percentage planning to hire in the next three months rose to its highest level since September 2007. Along those lines, the number of manufacturing job postings increased from 283,000 in November to 297,000 in December. We have seen job openings in the sector recover from weaknesses midyear in 2013. Nonetheless, manufacturing net hires eased in December, and there was notable softness in the larger economy, both for new hires and job openings.

This week, we will get new numbers for the housing market and the latest data on manufacturing activity from a number of sources, including surveys from the New York and Philadelphia Federal Reserve Banks and Markit. The latter will report Flash Purchasing Managers’ Index (PMI) findings for the United States, China and the Eurozone. We will be looking for further evidence on the impact weather has had for manufacturers in the United States and for signs of improvement overseas. The Chinese PMI data had contracted in January’s report, but with output continuing to grow modestly. (For more information on worldwide trends, see the Global Manufacturing Economic Update, which was released on Friday.) Other highlights for the week include the latest data on consumer and producer prices, leading indicators and existing home sales.

Chad Moutray is the chief economist, National Association of Manufacturers.

retail sales - feb2014

University of Michigan: Consumer Confidence Ebbed Slightly to Begin 2014

By | Economy | No Comments

The University of Michigan and Thomson Reuters noted that consumer confidence ebbed slightly to begin the new year. The Consumer Sentiment Survey’s overall index dropped from 82.5 in December to 80.4 in January, according to preliminary data. (Note that final data for the month will be released on January 31.) The expectation had been for consumer attitudes to extend the gains made in December, with Americans recovering from the more-pessimistic tone observed surrounding the partial government shutdown.

This suggests that the public remains somewhat anxious about economic conditions, with easing noted in the measures both for the current environment (down from 98.6 to 95.2) and for future expectations (down from 72.1 to 70.9). Nonetheless, the data also indicate that consumers were more upbeat to begin 2014 than they were at the start of 2013. In January 2013, consumer sentiment was just 73.8, with both individuals and businesses continuing to be downbeat in the aftermath of the fiscal cliff debate.

Chad Moutray is the chief economist, National Association of Manufacturers.

University of Michigan: Consumer Confidence Falls to its Lowest Point since April

By | Economy | No Comments

After reaching a six-year high in July, consumer confidence has fallen for the second straight month, according to the University of Michigan and Thomson Reuters. The Consumer Sentiment Survey’s index declined from 85.1 in July to 82.1 in August to 76.8 in September. Note that this is preliminary figure, with a final index number released on Friday, September 27. Nonetheless, it highlights the fact that these types of surveys tend to react to pocketbook issues, and as such, higher gasoline prices and interest rates have resulted in a moderate decline in overall confidence. Slower job growth might also be a factor.

While measures for current and future economic conditions both declined in September, it was the expectations component that declined the most, down from 73.7 to 67.2 for the month. The index for current economic conditions decreased less dramatically, down from 95.2 to 91.8.

It is hard to know exactly what the survey respondents were thinking when answering these questions, but the forward-looking measure has now fallen for the third straight month. In addition to the economic headwinds mentioned earlier, the possibility of fiscal policy confrontations might also be on their minds. Moreover, respondents were more than likely completing this survey with geopolitical uncertainties mounting in Egypt and Syria.

Of course, the real importance of looking at consumer perceptions is the linkage that that may or may not have with consumer spending. With consumption accounting for roughly 70 percent of real GDP, spending is a major key to economic growth. Nonetheless, how consumers respond to surveys is not always correlated with purchasing behavior.

In this case, we learned earlier this morning that consumers did slow their purchases in August, with retail sales numbers up just 0.2 percent. While businesses are somewhat optimistic about higher demand over the coming months, we will closely watch both sentiment and spending numbers moving forward for clues about changes in that outlook. For now, let’s hope that the downturn in confidence is just a pause, as we had seen sentiment rising earlier in the year.

Chad Moutray is the chief economist, National Association of Manufacturers.