Consumer Sentiment Report Drags on Stocks

[papau]

http://story.news.yahoo.com/news?tmpl=story&cid=568&ncid=749&e=2&u=/nm/bs_nm/markets_stocks_dc

Consumer Sentiment Report Drags on Stocks

By Rachel Cohen

NEW YORK (Reuters) - U.S. stocks fell on Friday as investors digested a worse-than-expected report on consumer sentiment, showing people were cautious about the economy.

U.S. consumer sentiment fell sharply through mid-February, according to a survey released by the University of Michigan. <snip>

The University of Michigan's preliminary reading of consumer sentiment tumbled to 93.1 in February from January's final reading of 103.8, which was its highest level in over three years, according to market sources who saw the report.

Economists had forecast a reading of 103.3.

An earlier report from the Labor Department (news - web sites) showed the price of goods imported into the United States rose sharply in January, advancing by much more than expected and signaling the weaker dollar may finally be making itself felt.

Another report showed the U.S. trade deficit widened nearly 11 percent in December, as strong U.S. economic growth sucked in record imports and exports inched lower despite a weaker dollar. <snip>

[lancdem]

1. Wow

It was way less than expected. Not good news for *.

[JPace]

2. So wages are going down and now

prices are going up....its that great
bush economy in action!

Truth is prices have been going up for
a long time but they have been hiding it.

[ProfessorGAC]

3. Economists Have NOT Been Predicting A 103.3

A few economists who work for the administration and are bought and paid for Ph.D. prostitutes thought that. I don't personally know one economist who predicted a number that high. I predicted <100, right here on DU at least 2 months ago, when i covered this normal end of year increase.

The uptick in consumer sentiment in Nov/Dec 2003 was exactly within the range of predictable increase EVERY November and December for the last 40 years. (Remember that the January # is from December data, and so on.) This February number is from January sentiment.

None of us who actually understand economics and know how to interpret and analyze the data for the last hundred freakin' years thought consumer sentiment was actually going up. That would have required a mass lobotomy.

The analysts on Wall Street are more concerned with timing than facts. The whole thing is speculative for short term gains and has nothing(!) to do with economics. It's all just best guess analysis on how to make a quick hit based upon reading the emotions and instincts of others. It's closer to poker than it is econometric analysis.

You can search DU archives if you wish, but everything in this post and link is exactly what i've been saying here at DU for at least 2 years.

Finally, the financial community is understanding what economists who aren't conservatives have known since the Reagan era. Gee, it's only taking them 20 years to catch up.
The Professor

[Arugula Latte]

4. good post

thanks.

[papau]

5. Amen - you were indeed correct - I suspect we have - with you - more

econ talent at DU than they have at the WH!

:-)