February Mich Sentiment

Updated 09-Mar-10 19:34 ET

Highlights

The University of Michigan Index of Consumer Sentiment was revised down from 73.7 in the preliminary reading to 73.6.
The consensus expected the index to be revised up to 73.9.

The revision to the consumer sentiment index follows the Conference Board's Consumer Confidence Index's negative February result, but at a much lower extreme. The confidence index fell over 10 points to 46.0.
Consumers became more worried about the current economic situation this month as the economic conditions index was revised down from 84.1 to 81.8. It is now only 0.7 percentage points higher than January's final reading.
The long-term outlook is still giving consumers a bit of concern, but at a significantly lesser rate than originally thought. The economic outlook index was revised up from 66.9 to 68.4 and is now only down 1.7 percentage points from January.
In general, consumer surveys do a poor job at predicting consumption growth. Even though both the sentiment and confidence surveys posted declines in February, this does not necessarily translate into lower consumption growth. The consumer survey numbers are highly correlated with changes in unemployment, gasoline prices, and media reports. Consumption growth follows changes in income.

Sentiment readings are a reflection of a variety of events rather than an accurate tool for forecasting consumer spending. Gas prices and political events can have an outsized impact on sentiment. In general, these data are of very little economic value.

Category	FEB	JAN	DEC	NOV	OCT
Sentiment	73.6	74.4	72.5	67.4	70.6
Outlook	68.4	70.1	68.9	66.5	68.6
Present conditions	81.8	81.1	78.0	68.8	73.7