August 27, 2010 Final Report
Note from dshort: The chart below includes today's downward revision of Q2 GDP from 2.4% to 1.6%.
The University of Michigan Consumer Sentiment Index Report gives a final August reading of 68.9, up slightly from the July Final Report reading of 67.8.
The survey's chief economist, Richard Curtin, has this summary:
Optimism has been the primary characteristic of American consumers during the past half century. To be sure, consumers repeatedly suspended that optimism around recessions, but the suspension was always considered temporary. Now economic uncertainty reigns. It is far too early to declare that consumer pessimism has become the new default outlook of consumers. Nonetheless, the economic uncertainty that now exists has caused consumers to reduce their spending and increase their precautionary saving. The lesson of the financial crisis for consumers was that their best defense against economic adversity was to reduce their own debt.
(See the full report in PDF format.)
Because the sentiment index has trended upward since its inception in 1978, I've added a liner regression to help understand the pattern of reversion to the trend. I've also highlighted recessions to help evaluate the value of the Michigan Consumer Sentiment Index as a leading indicator of the economy.
(Click to enlarge)
Disclosure: None
