Consumer Sentiment at 7-Year High

When it comes to understanding the U.S. Economy, there are many different ways that experts, pundits, and policy makers attempt to measure progress. Some look at the monthly jobs report as the key indicator; other suggest that median wage income ought to be the new guiding light. Consumer sentiment might also be a good way to measure how people at large feel about the economy.

The Consumer Sentiment Index, taken by Thomson-Reuters and the University of Michigan, is a five question survey that aims to capture the mood about current economic conditions. The survey asks the taker about the conditions of their family’s income, whether they are better or worse off, and if businesses and the economy at large will be better off next year.

This month, the survey found consumer sentiment at 89.6, which was the highest rating since July 2007. Despite positive feelings about lowering gas prices and the lower unemployment rate, many still felt like their income would not improve by much in the coming year. Still, this month’s report was on the whole good news. Consumer Sentiment took a major hit even before the financial crisis of 2008, when the initial recession began in late 2007. During the Debt Ceiling negotiations of 2011, Consumer Sentiment took another dive after the fear that the US might default on the national debt. Afterwards, it has slowly inched back up and made gains over the past year—finally returning to high levels after seven years.