The University of Michigan Consumer Sentiment Survey slipped to 88.4 in March, down from February's 91.3 and its lowest level in six months. Why should you care about the UofM survey? In a nutshell, you shouldn't. But, you sort of have to.
Here's why: Consumer confidence is considered important by markets because hundreds of "real people" are telling the surveyors how they feel about the economy.
Because the surveyed people are the "word on the street", economists can get a better glimpse into how the economy is likely to perform in the near-term.
For example, if people are feeling good about their personal finances, they are more likely to spend more and propel the economy forward. The reverse is also true. If they feel uneasy about their personal finances, they will curtail spending and pull the economy back.
But, confidence surveys can be worthless because what people say and what they do are often two very different things.
On the heels of today's UofM survey, the Commerce Department released the Personal Spending report.
We would expect that the falling University of Michigan confidence numbers would translate into lower levels of Personal Spending. On the contrary! Personal Spending was up by whopping 0.6%. People are less confident about the economy, but are still choosing to spend more.
Mortgage markets are mixed on today's data and mortgage rates are relatively unchanged.
