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=DJ Univ Michigan Consumer Sentiment Falls Hard In February

By Michael S. Derby

Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Consumers' views of the economy took a sharp step backward in February, according to a report released Friday.

 

The University of Michigan's consumer sentiment index for February was said to have slid to 94.4, versus the 103.8 seen in January, according to those who have seen the report. The report is released only to subscribers.

 

The drop in the final reading for February was presaged by the unexpectedly weak 93.1 reading seen in the preliminary release of the report two weeks ago.

 

February's month-end reading was in line with economists' expectations. The median estimate of economists surveyed by Dow Jones Newswires called for a 94.0 reading.

 

 

(MORE) Dow Jones Newswires

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DJ Table Of Data From US Chicago Purch Managers' Report

Seasonally Adj. Indexes

 

Feb. Jan. Dec. Nov. Oct. Sep.

Business Index 63.6 65.9 61.2 62.9 55.8 53.0

Production 73.0 76.5 68.9 68.3 63.9 57.1

New Orders 67.5 69.7 66.1 68.5 61.6 54.8

Order Backlog 54.4 57.3 52.2 53.6 49.2 51.1

Inventories 46.5 37.4 42.2 44.3 38.6 53.5

Employment 54.8 48.3 49.6 49.3 51.4 46.0

Supplier Deliveries 57.3 56.2 57.2 54.4 49.8 45.9

Prices Paid 66.9 67.8 57.3 68.1 59.8 53.0

(from Dow Jones Newswires)

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Hey robots...did I mention that -----Univ Michigan Consumer Sentiment Falls In February

 

The drop in the Michigan index has been joined by sharp declines in other major confidence indexes. The Conference Board reported earlier this week that its reading of consumer confidence dropped to 87.3 in February, from 96.4 the prior month.

 

Economists have struggled to explain the souring mood, given that growth is moving ahead at a smart clip and is widely expected to remain on that path. They have said that part of the problem may be that labor markets are still continuing to have difficulty shaking off the soft economic conditions of the last several years.

 

Others have blamed the confidence slide on the election campaign. They point to the Democratic presidential candidates, who as part of their effort to capture their party's nomination have been severely criticizing the current administration for its handling of the economy. That's kept a steady drumbeat of downbeat economic commentary in the press, which some anal cysts believe is beginning to weigh on the consumer sector.

 

In any case, what goes on with consumer confidence continues to be one of the lesser interests of forecasters, and more importantly, policy makers. Federal Reserve Governor Susan Bies on Thursday noted that confidence indexes "tend to be volatile" and, echoing a point made by other central bankers, said that she preferred to look at what consumers are actually doing with their money.

 

Other details in the Michigan data also pointed toward a weaker mood for the consumer sector. The private research group's gauge of current conditions moved to 103.6 in the final February tally, versus 109.5 in January. The mid-February index had been at 100.4.

 

The group's expectations index stood at 88.5 at the end of February, compared with 100.1 in January. The preliminary February reading had been 88.4.

 

The University of Michigan report is based on a telephone survey of around 500 households. The group's preliminary report is constructed based on a survey of around 250 households.

 

 

-By Michael S. Derby, Dow Jones Newswires; 201-938-4192; [email protected]

 

 

(More on Dow Jones Newswires)

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DJ Venezuela Oil Min: Low Inventories Behind High Oil Prices

CARACAS (Dow Jones)--Venezuela Oil Minister Rafael Ramirez said Friday that low oil inventory levels have contributed to currently high oil prices along with factors such as instability in the Middle East.

 

Ramirez, however, said the Organization of Petroleum Exporting Countries may still decide to cut output again during a March 31 meeting because he said current high prices could be temporary.

(Dow Jones Newswires...no link)

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