Consumer Sentiment, Stock Prices and Housing

Consumer Sentiment, Stock Prices and Housing

October 12, 2012 The Thompson Reuters University of Michigan Consumer Sentiment Index is no longer publicly published. I have added some items to the chart produced by Reuters’s Scott Barber to better show the trend, and how sentiment relates to stock prices.

Michigan Sentiment and Stock Prices

Michigan Sentiment and Stock Prices – Click to enlarge

 

Updated June 6, 2012

University of Michigan Consumer Sentiment, Stocks and Housing - Click to enlarge

University of Michigan Consumer Sentiment, Stocks and Housing – Click to enlarge

Consumer sentiment has been in a broad secular downtrend for 12 years. Rising stock prices no longer drive as much positive response in consumer sentiment as in the 20th century. This measure has recovered only to the levels reached at the bottom of the 1992 recession.

University of Michigan Consumer Sentiment and Stocks- Click to enlarge

University of Michigan Consumer Sentiment and Stocks- Click to enlarge

Consumers never bought in to the 2005-07 stock market bubble. While trending positive since 2009, in total they are even less enthused about the current one.

So watch out when you hear the pundits talking about “strong” consumer sentiment. It’s all relative. Other sentiment measures, such as those published by the Conference Board, Bloomberg, and Gallup, all show similar long term trends, but all focus only on the trends of the past few years in their reporting. This is highly misleading.

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