The University of Michigan’s Index of Consumer Sentiment is one of two monthly US consumer sentiment indices, the other being the Conference Board’s Consumer Confidence Survey. It covers personal finances, business conditions and buying conditions. As private consumption accounts for a majority of GDP growth in advanced economies, consumer sentiment surveys present a picture of the economy well in advance of official reports. However, as leading indicators, they are no more useful than other widely-available data.
The latest survey conducted by the University indicates US consumers view their overall prospects favourably despite their awareness of the aims of the Fed in raising interest rates. The result was there was no change in the index from November’s reading of 97.5, a reading which is still well above the long-term average (see chart below).
