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US Consumer Sentiment Strong, Chicago PMI Doubtful

Posted by Joseph Trevisani on Jun 28, 2013 12:16:00 PM

American consumers’ positive attitude remained solid in June, just below last month’s almost six year high.  Business sentiment in the Chicago area manufacturing sector slipped unexpectedly dragged down by weakening orders books at home and overseas.

The final revision from the University of Michigan and Thompson Reuters  consumer sentiment index rose to 84.1  from the preliminary score of 82.7. But it was lower than the May score of  84.5, which had been the highest since July 2007. Economists had forecast a slight gain to 83.0

The index of current sentiment sank to 93.8 from 98.0 in May, the best level for this index since August 2007.  Consumer expectations for the state of the economy and their personal finances in six months rose slightly to 77.8 in June from 75.8 the prior month. Except for last Octobers reading of 79.0, June was the most optimistic US consumers have been about the future since July 2007.

The Chicago Business Barometer from the Institute for Supply Management skidded to 51.6 from May's more than one year high of 58.7. Analysts had predicted a more modest drop to 55.0. It was the biggest monthly decrease in over four years. A measure of 50 is the index division between expansion and contraction.

The index for new orders fell to 54.6 from 58.1 in May, employment rose to 57.8 from 56.9 and production decreased to 57.0 from 62.7

The Chicago ISM has been somewhat out of tune with other regional surveys from the Institute for Supply Management and the Federal Reserve. The Milwaukee Purchasing Managers Index rose to 51.55 in June from 40.67 while the New York ISM fell in May to 54.4 from 58.3 in April. The June figure will be reported on Tuesday.

Regional Fed surveys have painted a generally improved economic picture. The Empire Manufacturing Survey from the New York Fed rose to 7.84 in June from -1.43 the prior month. The report from the Philadelphia Fed Business Outlook Survey was also much better surging to 12.5 in June from -5.2 for the best reading in more than two years. Likewise the Dallas Fed saw considerable improvement with its Manufacturing Activity Index rising to 6.5 in June from -10.5.

Joseph Trevisani

Chief Market Strategist

WorldWideMarkets

Charts: Bloomberg

ScreenHunter 1363 Jun. 28 14.47

ScreenHunter 1364 Jun. 28 14.47

 

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