Consumer Spending slows, UMichigan Confidence survey dips. - CountingPips Forex & Currency Trading Blog

March 28, 2008 - Forex Economic News

Consumer Spending slows, UMichigan Confidence survey dips.

Consumer spending rose by the smallest amount in over year in news released today by the U.S. Commerce Department. Consumer spending increased by just 0.1 percent in February, the slowest pace in 17 months and down from 0.4 percent in January. Personal income rose in February by 0.5 percent according to the report. This was the tenth straight month that personal income has shown growth and follows a 0.3 percent rise in January.

The final figures for the March University of Michigan/Reuters consumer confidence survey showed that the survey fell to a 16 year low on the feeling that the U.S. economy is already in a recession. Richard Curtin, Director of the Reuters/University of Michigan Surveys, stated in the report that “A recession
has occurred whenever the Sentiment Index has declined as much as it has fallen during the past year, including the recessions occurring from the mid 1950's to the early 2000's.” The survey reported that eighty-six percent of the surveyed consumers felt the economy was already in a recession.

The UMichigan/Reuters consumer sentiment index score fell to 69.5 in March, down from a 70.5 estimate at the beginning of March. This month's survey score is below the 70.8 registered in February and down from the March 2007 score of 88.4. The expectations index, which measures future economic sentiment, declined from 62.4 in February to 60.1 in March and down from 78.7 in March of 2007. Households expressing financial hardship increased to the highest level since 1991 in the March survey while more than fifty percent of consumers surveyed also felt that unemployment would rise.

The U.S. dollar has been trading higher up verses the euro, pound sterling and yen this morning despite the gloomy news releases. The USD/JPY pair is hovering close to the 100 yen to a dollar range while the GBP/USD pair pierced below the 2.0000 level. The EUR/USD pair is trending a bit lower around 1.5760 today after making hefty gains this week.

Tags: university of michigan, reuters, consumer sentiment, confidence, spending, personal income,

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