Consumer Sentiment Falls

Wall Street Journal Blog
http://blogs.wsj.com/economics/2012/03/16/consumer-sentiment-falls-amid-higher-gas-prices/


Kathleen Madigan:

U.S. consumers in early April felt more cautious about the current economy, according to data released Friday.

The Thomson Reuters/University of Michigan consumer sentiment index in early April stood at 75.7, compared to 76.2 at the end of March and a preliminary March reading of 74.3, according to an economist who has seen the report.

Economists surveyed by Dow Jones Newswires had expected the preliminary April reading to remain at 76.2.

The drop was centered in how consumers feel about the current economy. The current conditions index dropped to 80.6 from 86 at the end of March, while the expectations index improved to 72.5 from 69.8.
The current conditions reading was the lowest since December 2011, while the expectations index was the highest since September 2009.

Sentiment about the economy is being pulled in different directions. High gasoline prices are hurting sentiment, while a rising stock market in the first quarter lifted sentiment among households with equity investments.
Consumers are also dealing with news that the labor markets are not as strong as hoped. A week ago, the Labor Department reported job growth slowed sharply in March. Also, jobless claims jumped to 380,000 in the week ended April 7, the highest level since the end of January.

Within the Thomson Reuters/University of Michigan survey, the one-year inflation expectations reading fell to 3.4%, from 3.9% in late March. The inflation expectations covering the next five to 10 years remained at 3%.

Consumer expectations about the future seem to remain high.  Maybe this is because it's a political year and consumers expect our government to handle the strong hold of high gas prices, give us a balanced budget, and have some major bipartisanship.  Doubtful this is what their thinking!  Maybe its the old saying, "Hope for the best, expect the worse!".  But even this doesn't hold up because based on the consumer sentiment index consumers are expecting better for the future.  It's the present that people are unsure and wary about.  With crippling high gas prices, an extremely slow real estate market recovery (even with small glimpses of hope), and a highly unproductive government, what is there not to be worried about today.  I wasn't involved with the results of the CSI but I can agree all the way.  It's not tomorrow that I'm worried about, IT'S TODAY!  In the long run, I can make changes in spending habits, consumer mindset, and savings.  But in the short run, I'm being hit from every angle.