Surprisingly, consumer sentiment rises in March
In a financial climate and an economy like this, you look for small victories -- small upsides, amid the long struggle back to economic health and sustainable growth.
One such small positive occurred Friday: the Reuters/University of Michigan Surveys of Consumers said its consumer sentiment index for March (preliminary) increased to 56.6 from 56.3 in February, Reuters reports. Economists surveyed by Bloomberg News had expected the index to fall to 55 in March. The index's record low of 51.7 was set in May 1980.
But investors should not read too much into the Reuters/Univ. of Michigan index, as it tends to be less of a market-mover than the more-closely-followed, comparable index published by The Conference Board.
Confidence in Obama's policies rises
Another positive: The Reuters/University of Michigan's index pertaining to consumers' confidence in President Barack Obama's economic policies rose to 23 percent in March from 14 percent in February, Reuters reported. However, the overall assessment of economic conditions fell to 62.3 in March from 65.5 in February.
Market Analysis: Again, a small victory. The index's increase in March (preliminary) is nothing to write (or e-mail) home about, but given the string of bearish and negative economic data lately, the markets and investors will take the uptick in consumer sentiment.
Investors need to pay attention to consumer sentiment because it usually precedes consumer decisions to buy (rising sentiment) or hold off purchases (falling sentiment) -- and historically consumer spending has accounted for the bulk (60-65 percent) of U.S. GDP.