The University of Michigan Consumer Sentiment Index is a

consumer confidence Consumer confidence is an economic indicator that measures the degree of optimism that consumers feel about the overall state of the economy and their personal financial situation. If the consumer has confidence in the immediate and near future ...

index published monthly by the

University of Michigan The University of Michigan (U-M, U of M, or Michigan) is a public university, public research university in Ann Arbor, Michigan, United States. Founded in 1817, it is the oldest institution of higher education in the state. The University of Mi ...

's Institute for Social Research. The index is normalized to have a value of 100 in the first quarter of 1966. Each month at least 500 telephone interviews are conducted of a

contiguous United States The contiguous United States, also known as the U.S. mainland, officially referred to as the conterminous United States, consists of the 48 adjoining U.S. states and the District of Columbia of the United States in central North America. The te ...

sample. Interviewers ask fifty core questions. 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 The Bureau of Economic Analysis (BEA) of the United States Department of Commerce is a U.S. government agency that provides official macroeconomic and industry statistics, most notably reports about the gross domestic product (GDP) of the United ...

. Joanne Hsu was named the director and chief economist of the Consumer Sentiment Index in 2022.

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 * To judge the consumer's level of optimism or pessimism

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

Implications

The Index has implications that can influence the value of the dollar,

stock Stocks (also capital stock, or sometimes interchangeably, shares) consist of all the Share (finance), shares by which ownership of a corporation or company is divided. A single share of the stock means fractional ownership of the corporatio ...

s, and bonds. Thomson Reuters used to be an exclusive distributor of the University of Michigan's survey results.

CNBC CNBC is an American List of business news channels, business news channel owned by the NBCUniversal News Group, a unit of Comcast's NBCUniversal. The network broadcasts live business news and analysis programming during the morning, Day ...

reported on June 12, 2013 that the

provided

Thomson Reuters Thomson Reuters Corporation ( ) is a Canadian multinational corporation, multinational content-driven technology Conglomerate (company), conglomerate. The company was founded in Toronto, Ontario, Canada, and maintains its headquarters at 1 ...

news service with the data early, so that Reuters could release the CSI to select, paying clients at 9:55 a.m., five minutes before it released the data to the general public on its web site at 10:00 a.m. In addition, Reuters released the data via high speed communication channels to select clients two seconds earlier. CNBC revealed that

trading Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market (economics), market. Traders generally negotiate throu ...

activity increased dramatically within milliseconds of 9:54:58 a.m. Traders who subscribed to either service were able to take advantage of the CSI before the university released it to the public. Former

Securities and Exchange Commission The United States Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street crash of 1929. Its primary purpose is to enforce laws against market m ...

Chairman Harvey Pitt opined that this might present a fairness issue and destroy confidence in the market by the public.

announced on July 8, 2013 that it was suspending its early release practice as part of an agreement with the New York Attorney General's office. The University of Michigan stated it received about a million dollars a year from Reuters for this advance information, but said it couldn't do the research without the Reuters payment. Since January 2015, Index data is available from multiple sources including the university's website, Bloomberg, and Macrobond.

References

External links

* {{Official website Consumer confidence Macroeconomic indicators University of Michigan

Objectives

Inputs

Implications

See also

References

External links