Economy Watch: Consumers Still Mostly Optimistic About the Economy

Consumer sentiment about current economic conditions reached its highest level since 2000, according to the University of Michigan's latest survey, which bodes well for the health of the retail sector.
Source: University of Michigan Surveys of Consumers
Source: University of Michigan Surveys of Consumers

Consumer sentiment continues to be strong, an important consideration for the health of the retail sector at a time when a good number of retailers are contracting. The University of Michigan reported on Friday that as of mid-March, its Index of Consumer Sentiment edged up to 97.6 from 96.3 a month earlier, and 91.0 a year ago.

The Current Economic Conditions component reached its highest level since 2000, largely due to improved personal finances, according to Survey of Consumers Chief Economist Richard Curtin.

He also noted a continuing, and historically unprecedented, fact about the Expectations component of the index. “While current economic conditions were not affected by partisanship, this was not true for the component about future economic prospects: among Democrats, the Expectations Index at 55.3 signaled that a deep recession was imminent, while among Republicans, the Index at 122.4 indicated a new era of robust economic growth was ahead.” Independents were roughly between those poles.

So far, the economy is still on track for growth, which is good for all property types. Separately, the Conference Board reported on Friday that its Leading Economic Index for the U.S. increased to 126.2 in February (2010 = 100), following a 0.6 percent increase in January, and a 0.6 percent increase in December.

“After six consecutive monthly gains, the [index] is at its highest level in over a decade,” said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board. “Widespread gains across a majority of the leading indicators points to an improving economic outlook for 2017, although GDP growth is likely to remain moderate.”