The Michigan Consumer Sentiment Index is a key economic indicator that helps predict the future movements in the economy by illustrating the average US consumer’s confidence level. Predominantly helpful for retailers, economists, and investors, data for this indicator is collected through telephone surveys every month to a random cross section of US consumers across the country. Consisting of 60% new recipients, and 40% repeat recipients from previous surveys, the survey attempts to accurately measure and portray shifts in consumer sentiment and confidence in the economy.
“Respondents are polled to express their opinion on the following questions: Whether their families' financial conditions have become better or worse than a year ago; Whether respondents expect their families' financial conditions to become better or worse a year from now; Whether business conditions in the next 12 months will become better or worse; How conditions in the country may change in the next five years - whether respondents expect stability or growth of unemployment or depression; Whether it is a good time to purchase large household items and make other large purchases (such as to buy a house, a car, etc.). Answers to these questions are calculated as follows: the percentage of negative values is subtracted from positive ones, and 100 is added to the resulting value. The resulting values are added up and divided by 6.7558 (the benchmark value), after which 2 (the correction constant for the sample composition) is added to the resulting figure.”
Consumers who feel more confident about the future of the economy are more likely to increase their demand and purchasing habits, and pull money out of savings. However, the opposite is true when consumers feel less confident. When more money flows through the economy, there is less worry for recession, and the index value increases.
What will be the preliminary value of the US Michigan Consumer Sentiment Index in May 2021?
Alternative forecasts and historical data can be found through these sources:
Predictions should reflect the absolute index number for the preliminary monthly value of the CSI.