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 e ...

index published monthly by the

University of Michigan , mottoeng = "Arts, Knowledge, Truth" , former_names = Catholepistemiad, or University of Michigania (1817–1821) , budget = $10.3 billion (2021) , endowment = $17 billion (2021)As o ...

. 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 (officially the conterminous United States) consists of the 48 adjoining U.S. states and the Federal District of the United States of America. The term excludes the only two non-contiguous states, Alaska and Hawaii ...

sample. Fifty core questions are asked. The consumer confidence measures were devised in the late 1940s by Professor

George Katona George Katona (6 November 1901, Budapest – 18 June 1981, West Berlin) was a Hungarian-born American psychologist who was one of the first to advocate a rapprochement between economics and psychology. He graduated with a doctorate in Experime ...

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 In typography, leading ( ) is the space between adjacent lines of type; the exact definition varies. In hand typesetting, leading is the thin strips of lead (or aluminium) that were inserted between lines of type in the composing stick to incre ...

published by the

U.S. Department of Commerce The United States Department of Commerce is an executive department of the U.S. federal government concerned with creating the conditions for economic growth and opportunity. Among its tasks are gathering economic and demographic data for busin ...

, Bureau of Economic Analysis.

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 In finance, stock (also capital stock) consists of all the shares by which ownership of a corporation or company is divided.Longman Business English Dictionary: "stock - ''especially AmE'' one of the shares into which ownership of a company ...

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

CNBC CNBC (formerly Consumer News and Business Channel) is an American basic cable business news channel. It provides business news programming on weekdays from 5:00 a.m. to 7:00 p.m., Eastern Time, while broadcasting talk sho ...

reported on 12 June 2013 that the

provided

Thomson Reuters Thomson Reuters Corporation ( ) is a Canadian multinational media conglomerate. The company was founded in Toronto, Ontario, Canada, where it is headquartered at the Bay Adelaide Centre. Thomson Reuters was created by the Thomson Corpora ...

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. An early form of trade, barter, saw the direct excha ...

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 U.S. 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. The primary purpose of the SEC is to enforce the law against market ...

Chairman

Harvey Pitt Harvey L. Pitt (born February 28, 1945) is an American lawyer who served as the 26th chairman of the U.S. Securities and Exchange Commission (SEC), from 2001 to 2003. History Pitt graduated from Stuyvesant High School in 1961. He graduated fr ...

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

announced on 8 July 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 University's website, Bloomberg, and Macrobond.

References

External links

* {{Official website Consumer confidence University of Michigan

Objectives

Inputs

Implications

See also

References

External links