Economy Watch: Consumers Feeling Better About Current Conditions, Outlook
- Apr 14, 2014
The preliminary Reuters/University of Michigan consumer sentiment index for April came in at 82.6 on Friday, according to the university, an increase from 80.0 at the end of March, and 79.9 in mid-March. The latest reading is the highest since last summer.
Both components were up. Consumer expectations came in at 73.3, compared with a final March reading of 70.0. Current conditions rose to 97.1, compared with the final March reading of 95.7. Expectations probably gained because of higher confidence in the employment market, which seems to have made strides since a case of the winter blahs, as well as optimism about rising income.
Consumer sentiment, as measured by the University of Michigan for over 35 years, is still relatively low—and has been since the onset of the recession, though roughly comparable to the low readings of the late 1970s and early ’80s recessions, as well as the recession of the early 1990s. During most of the 2000s, consumer sentiment hovered around 90.0, so the current rate is approaching pre-recessionary levels, but it isn’t there yet.
PPI rises in March
The overall U.S. Producer Price Index, which measures wholesale prices, advanced 0.5 percent in March, according to the Bureau of Labor Statistics on Friday. The increase follows a decline of 0.1 percent in February but a rise of 0.2 percent in January.
The index was also up 1.4 percent for the 12 months ended in March, the largest 12-month increase since August 2013, when the PPI experienced a 1.7 percent year-over-year increase. Wholesale prices less foods, energy, and trade services rose 0.3 percent in March after edging up 0.1 percent in each of the prior two months.
A 3.3 percent increase in wholesale prices for apparel, jewelry, footwear and accessories retailing led the advance in services. Among goods, the BLS also noted increases in the wholesale prices of pork; residential natural gas; pharmaceutical preparations; sausage, deli and boxed meats; and fluid milk products. Wholesale prices for chemicals and allied products wholesaling; services related to securities brokerage and dealing; portfolio management; food wholesaling; and airline passenger services increased as well. On the other hand, there were declines in wholesale prices for gasoline, diesel fuel, liquefied petroleum gas, primary basic organic chemicals and fresh fruit and melons.
Wall Street had another down day on Friday, with the Dow Jones Industrial Average off 143.47 points, or 0.89 percent. The S&P 500 declined 0.95 percent and the Nasdaq was down 1.34 percent.