"Economists are pessimists: they've predicted 8 of the last 3 depressions."
--Barry Asmus

The Required Disclosures

The information presented in this blog and its individual articles is provided for informational use only and should not be considered investment advice or an offer for a particular security. The contents reflect the views and opinions of the individual writer as of the date the article was written and do not necessarily represent the views of the individual writer on the current date. They also do not in any way, shape, or form represent the views of the Firm Never-To-Be-Named. Any such views are subject to change at any time based upon market or other conditions and The Great Redoubt and its individual writers disclaim any responsibility to update such views. These views should not be relied on as investment advice, and because investment decisions for any security are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any contributor to The Great Redoubt. Neither The Great Redoubt nor any individual author can be held responsible for any direct or incidental loss incurred by applying any of the information offered. Please consult your tax or financial advisor for additional information concerning your specific situation.

Wednesday, November 24, 2010

The Rest Of The Measures!

Consumer sentiment, also known as the Reuter's/University of Michigan Consumer Sentiment Index, is due out soon. This is a monthly survey of at least 500 households. The goal is to assess consumer attitudes on the economy, to try to understand and forecast changes in the economy, and to judge the level of optimism or pessimism in the consumer's mind. Numbers over 50.0 are good, and improving numbers are good. Consumer sentiment was at 69.3 in October, and the Street is looking for an extremely tame improvement to 69.5 for November.

Along with consumer sentiment, we're looking for New Home Sales. This figure, while useful, is not as exciting to the market as either housing starts or existing home sales. Most of the economic impact of a new home has already been felt by the time it is sold, after all. Still, given the Fed's current policy of reinflate the housing bubble no matter what", this is an important number right now. September saw 307k new home sales, and the Street is looking for an increase to 314k new home sales for October.

How did we do? The consumer confidence press release can be viewed at https://customers.reuters.com/wetfetch/index.aspx?CID=02701&doc=PR201011.pdf&base=/community/university/default.aspx, while the new home sales press release can be read at http://www.census.gov/const/newressales.pdf.

Consumer confidence rose unexpectedly to 71.6, beating expectations, with current conditions being seen as more favorable than future expectations. Half of the households surveyed expect the economy to remain unchanged during the coming year, although the majority do expect things to slowly improve. Also, despite the favorable personal income report earlier, one in three households surveyed reported a decline in household income. Only 25% expect their finances to improve in the year ahead, and the majority expect no income increase whatsoever.

New home sales came in substantially worse than expected, with only 283k for October. On the other hand, most of those were sold in the South, where sales increased. That probably stands to reason, given the time of year and the climate.

No comments:

Post a Comment