University of Michigan Consumer Sentiment Posts Surprise Decline
Hot on the heels of the Federal Reserve announcing it was to halve the number of interest rate increases due to the fragility of the US economy, came weaker than expected University of Michigan consumer sentiment data which appears to rubber-stamp that decision.
University of Michigan Consumer Sentiment
In a report released by the University of Michigan, preliminary data showed on Friday that the University of Michigan consumer sentiment unexpectedly fell last month. The prelude to official US consumer sentiment data dropped to a seasonally adjusted figure of 90.0, down from the 91.7 recorded in the preceding month. This came after analysts had been expecting the University of Michigan consumer sentiment figure to show an increase to 92.2 for last month.
Consumer confidence is important to the US economy as 70% of the entire US economy – the world’s largest economy, is driven by consumer spending. The University of Michigan Consumer Sentiment Index gauges the relative level of current and future economic conditions in the US economy. There are two versions of the data released separately two weeks apart, preliminary and revised. The report released on Friday, which is compiled from a survey of around 500 consumers, normally has a greater impact than the revised data. The reading is compiled from a survey of around 500 consumers.
Immediately following the release of the UoM data, stocks increased with the Dow 30 rising 0.57%, and the S&P 500 gained 0.38%. Meanwhile, the tech-heavy NASDAQ Composite jumped 0.12% immediately after the announcement.
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