Michigan Consumer Sentiment: Little Changed [Dow Jones Industrial Average(INDEXDJX:.DJI)]

dataDoug Short: The University of Michigan Consumer Sentiment final number for January came in at 81.2, an increase from the 80.4 preliminary report, but below the December final of 82.5. Today’s was slightly above the Investing.com forecast of 81.0. The index is off its 85.1 interim high in July of last year.

See the chart below for a long-term perspective on this widely watched indicator. I’ve highlighted recessions and included real GDP to help evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.

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To put today’s report into the larger historical context since its beginning in 1978, consumer sentiment is now 5 percent below the average reading (arithmetic mean) and 3 percent below the geometric mean. The current index level is at the 36th percentile of the 433 monthly data points in this series.

The Michigan average since its inception is 85.1. During non-recessionary years the average is 87.5. The average during the five recessions is 69.3. So the latest sentiment number puts us 11.9 points above the average recession mindset and 6.3 points below the non-recession average.

It’s important to understand that this indicator is somewhat volatile with a 3.1 point absolute average monthly change. For a visual sense of the volatility here is a chart with the monthly data and a three-month moving average.

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For the sake of comparison here is a chart of the Conference Board’s Consumer Confidence Index (monthly update here).

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