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Consumer Sentiment Index Good Leading Indicator, Research Shows

Compiled By Deborah Austin Non-durable-goods consumers are putting their money where their mouths are -- nine months later -- suggests research from marketing information company ACNielsen U.S. ACNielsen found a correlation between the University of Michigan's Consumer Sentiment Index -- which tracks consumer attitudes about current economic conditions -- and actual purchases of food, health/beauty aids and non-food packaged goods tracked by ACNielsen's Homescan consumer panel. The research shows a nine-month lag between changing attitudes and changes in buying behavior. For example, the Consumer Sentiment Index fell between second-quarter and third-quarter 1998. It jumped greatly between fourth-quarter 1998 and first-quarter 1999, falling moderately in the second quarter. Purchasing dollars fell moderately between first-quarter and second-quarter 1999. They jumped significantly from third-quarter to fourth-quarter 1999, then tumbled moderately by first-quarter 2000. The findings should help more-precise anticipation of future consumer non-durables spending, says ACNielsen President Tim Callahan. ACNielsen, Stamford, Conn., is part of international media and information company VNU, Haarlem, Netherlands.

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