Is it bad luck to release a sentiment index reading on Friday the 13th? Apparently so. The Reuters/University of Michigan preliminary sentiment index for July came in at a very disappointing 72.0. That is the lowest reading for all of 2012. Bloomberg most recently showed that the consensus was 73.5 and Dow Jones projected a consensus expectation of 73.2 for the preliminary data in July.
What we find interesting is that this was supposed to represent an uptick from June’s 73.2 reading. With all of the corporate earnings warnings and negative news out of Europe we are stumped that the consensus was looking for a higher reading than in June. A conspiracy theorist might deduct that even the economists being surveyed are a bunch of bozos. Think about it… How could sentiment have been higher?
This report is based on questions and answers from only 500 households each month on their financial conditions and attitudes about the economy, and the report will be adjusted late in July as well. The aim of the report is obvious as consumer sentiment is supposed to be directly related to the strength of consumer spending.
One more bit of negative news flow, with more likely coming down the pipe.
JON C. OGG