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

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Friday, February 25, 2011

Consumer Sentiment

Given all of the international excitement, one burning question fills the hearts and makes sleepless the nights of the average broker:  How is the American consumer taking the news?  Well, maybe I exaggerate.  But it is an interesting question.
For January, the Consumer Sentiment Index came in at 74.2, which beat expectations (but was lower than December's results).  The Consumer Expectations Index rose to 69.3, and the Current Conditions Index fell to 81.8.  The Econoday-surveyed analysts are expecting a new level of 75.1.
Now, turning to the University of Michigan for the report (cheerfully titled "Improved Job Prospects Trump Rising Prices"), we get a fairly sunny picture.  The Consumer Sentiment Index rose to 77.5, the Consumer Expectations Index rose to 71.6, and the Current Conditions Index rose to 86.9.
Interestingly enough, the Consumer Sentiment Index moved along household income lines.  It was up 9.7% among households with incomes above $75,000, but fell 1.4% among lower income households.

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