Economy Watch: Consumers Grumpier in March
The Reuter's/University of Michigan's consumer sentiment index dropped a little more than expected for its mid-March reading.
By Dees Stribling, Contributing Editor
The Reuter’s/University of Michigan’s consumer sentiment index dropped a little more than expected for its mid-March reading, according to the university on Friday. The composite index was down 1.7 points at mid-month to 79.9, compared with 81.6 at the end of February, which wasn’t much changed from 81.2 readings for both mid-month February and the end of January.
Despite the tail end of a hard winter, the current conditions component of the index actually showed some strength, rising 0.7 points to 96.1. The expectations component dragged the overall reading down, however, by dropping 3.3 points to 69.4. Perhaps the sagging job market was the reason for this, or maybe international tensions about the Ukraine.
The consumer sentiment index is based on a University of Michigan’s Consumer Survey Center poll of 500 U.S. households each month. The university asks them about their financial condition, as well as their attitudes toward the economy. It’s an indirect measurement of the economy, since people’s spending habits are partly correlated with how positive or negative they feel about the economy.
PPI drops slightly in February
The Producer Price Index for “final demand” fell 0.1 percent in February, the Bureau of Labor Statistics reported on Friday. The decline followed advances of 0.2 percent in January and 0.1 percent in December. The BLS says that the February decrease can be traced to the index for services, which fell 0.3 percent. In contrast, wholesale prices for goods advanced 0.4 percent.
Final demand includes goods, services and construction, which are sold for personal consumption, capital investment, government purchases and export. The index for final goods without foods and energy rose 0.2 percent. Prices for food and energy moved higher, 0.6 percent and 0.5 percent, respectively.
By contrast, the wholesale cost of apparel, footwear and accessories fell 9.3 percent. The wholesale cost for machinery, equipment and related parts and supplies; food and alcohol; automotive fuels and lubricants; and brokerage compensation for residential property transactions also declined.
Wall Street had a down day on Friday, with the Dow Jones Industrial Average losing 43.22 points, or 0.27 percent. The S&P 500 was off 0.28 percent and the Nasdaq dropped 0.35 percent.