University of Michigan Consumer Sentiment Index
The University of Michigan Consumer Sentiment Index Thomson Reuters/University of Michigan Surveys of Consumers is a consumer confidence index published monthly by the University of Michigan and Thomson Reuters. The index is normalized to have a value of 100 in December 1964. At least 500 telephone interviews are conducted each month of a continental United States sample (Alaska and Hawaii are excluded). Five core questions are asked.[1]
The consumer confidence measures were devised in the late 1940s by Professor George Katona at the University of Michigan. They have now developed into an ongoing, nationally representative survey based on telephonic household interviews. The Index of Consumer Sentiment (ICS) is developed from these interviews. The Index of Consumer Expectations (a sub-index of ICS) is included in the Leading Indicator Composite Index published by the U.S. Department of Commerce, Bureau of Economic Analysis.
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[edit] Objectives
The Index was created and still is published with the following objectives:
- To assess near-time consumer attitudes on the business climate, personal finance, and spending;
- To promote an understanding of, and to forecast changes in, the national economy;
- To provide a means of incorporating empirical measures of consumer expectations into models of spending and saving behavior;
- To gauge the economic expectations and probable future spending behavior of the consumer; and
- To judge the consumer's level of optimism/pessimism.
[edit] Inputs
The Index of Consumer Expectations seeks to find how consumers view three things:
- Their own financial situation.
- The short-term general economy.
- The long-term general economy.
[edit] Implications
This Index has implications which can influence the value of the dollar, stocks, and bonds.
[edit] See also
[edit] References
- ^ Surveys of Consumers. University of Michigan.
[edit] External links
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