Consumer Sentiment Research Notes

by Jim Baird on May 1, 2015

CaptureConsumer sentiment rises in line with expectations in April

The University of Michigan Consumer Sentiment Index increased in April, coming in at 95.9, matching expectations for the month and confirming a moderate increase from the March index reading of 93.0.

Those surveyed indicated that they have become more optimistic in general in the past month – not only about current economic conditions, but also about the future as well.

Consumers generally feel more confident when the jobs market is strong, the stock market is elevated, and gasoline prices are low – all of which helps to explain why sentiment remains near post-recessionary highs.

A positive consumer outlook typically can nurture spending growth, and that has happened to a degree in recent years.  However, the current expansion has been characterized in part by a more cautious consumer, likely held in check by limited income growth and an increased focused on increasing savings and reducing debt.

As the jobs market continues to tighten, expectations have been for wage growth to accelerate in due time.  The recent news that the US employment cost index (ECI) rose at a strong pace during the first quarter may indicate that stronger wage growth is now at the doorstep, but it’s too early to conclude definitively.

It’s worth noting that the survey was completed before yesterday’s release of first quarter GDP, which was quite disappointing.  Nonetheless, it was already readily apparent that the economy had slowed earlier this year.

The fact that consumers remained stoic in the face of softer jobs data and an increasingly choppy stock market suggests a degree of resilience that should support consumer spending and overall growth.

Market Perspectives (April 2015)

by Jim Baird on April 14, 2015

Executive Summary

  • March brought continued volatility to global markets, though overseas equities continued to outperform the S&P 500 year to date.  Despite this volatility, stocks ended the quarter in positive territory.
  • U.S. large cap stocks declined while mid cap performance was relatively flat amid declining corporate earnings growth, uncertainty over the timing of future Fed rate hikes, and mixed economic indicators.
  • Overseas, equities also lost ground in March, but stocks in developed markets continue to fare better, year to date, than their counterparts in the U.S.
  • On the fixed-income side, bonds rallied mid-month, but rising yields towards the end of the month tempered this trend; the Barclays Aggregate ended the month with a 0.46% gain, resulting in a 1.61% return for the index in the first quarter.
  • Alternative investments ended the month mixed as commodities lost just over 5%, while the HFRX Global Hedge Fund Index managed a small gain.

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Economic Perspectives (First Quarter 2015)

April 14, 2015

The economy appears to be off to a sluggish start this year, in part due to the collapse in oil prices and the strength of the dollar.  Still, the economy is growing, and should be supported by confident U.S. consumers with some pent-up ability to spend. Read the full article>>

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March’s Employment Situation Research Notes

April 3, 2015

Job creation falters in March; jobless rate steady at 5.5% Job market conditions faltered in March as the economy created only 126,000 jobs. The advance was roughly half of the expected gain of 250,000 new jobs, and was well below February’s revised figure of 264,000. Coupled with the downward revisions of 69,000 to January and […]

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March’s Consumer Confidence Research Notes

March 31, 2015

Confidence rebounds in March on stronger expectations The tone was a bit more optimistic in March, as the Conference Board Consumer Confidence Index was lifted by improving expectations for the economy.  The index rose to 101.3 from an upwardly revised 98.8 in February. Confidence spiked at the beginning of the year as gas prices plummeted […]

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Market Perspectives (March 2015)

March 30, 2015

Executive Summary February was a good month for equities, as all major U.S. indices erased their January losses and ended the month in positive territory for the year. International stocks continued to perform well for the month, extending their positive January results and maintaining their year-to-date advantage over domestic stocks. Bond markets have experienced greater […]

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Q4 GDP Research Notes

March 27, 2015

Q4 GDP estimate unchanged at 2.2% Today’s GDP report confirmed the economy grew at a 2.2% annualized pace in the fourth quarter, unchanged from the prior estimate. For the year, the U.S. economy grew at a 2.4%. This revised data confirms that growth softened late last year on the heels of growth in excess of […]

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February’s CPI Research Notes

March 24, 2015

CPI unchanged over past 12 months; oil prices stabilize in February As anticipated, the Consumer Price Index rose 0.2% in February, as energy prices stabilized during the month after an extended period of monthly declines. For the last year, the CPI edged out of negative territory and was effectively unchanged. Core inflation, which eliminates volatile […]

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Jobless Claims (week of 3.14.15) Research Notes

March 20, 2015

Jobless claims hold steady Initial jobless claims were virtually unchanged at 291,000 for the week ended March 14, slightly higher than the previous week’s revised print of 290,000. The four-week average also edged higher to 304,750. Jobless claims have been hovering near the 300,000 mark for the last few months, as job creation has been […]

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Consumer Sentiment Research Notes

March 13, 2015

Consumer sentiment falls for second consecutive month The University of Michigan Consumer Sentiment Index fell in March to a four-month low, coming in at 91.2, easily missing the consensus expectation of 95.5. The decline reflected a dip in consumers’ assessment of current conditions, but also a decline in future expectations for the economy.  The drop […]

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