Michigan Current Conditions

The Index of Current Economic Conditions (ICC) is a sub-index in the University of Michigan Surveys of Consumers.

It is published by the Survey Research Center in the Institute for Social Research. Its siblings are the headline Index of Consumer Sentiment (ICS) and the outlook Index of Consumer Expectations (ICE).

It covers a national sample of American households in the 48 coterminous states plus DC, excluding Alaska and Hawaii. It uses a rotating panel with telephone interviews through the month, about 1,000 interviews and about 50 core questions. It tracks attitudes and expectations, not actual spending or the inflation rate itself.

Inflation expectations sit alongside it and do not enter it, and it carries no buy or sell threshold.

It is released monthly in two readings, a preliminary near mid-month and a final near month end. Collection starts on the Tuesday before the prior month final. Preliminary interviews run through the Monday before preliminary release, and final interviews run through the Monday before final release.

Both readings appear at about 10:00 AM ET, near the second Friday and near the final Friday. November and December shift slightly for holidays. The preliminary targets about 420 interviews and the final about 1,000, so the final replaces the preliminary with no scheduled revision after it.

Each release publishes the headline index, expectations, component values and inflation expectations. Higher means a better view, and moves are read by direction and size against the prior month and a year earlier.

Only two survey questions feed the ICC, equally weighted by summation, so moves reflect present finances and large purchase timing. No seasonal adjustment enters the calculation.

• Personal finances versus 1 year ago: whether the household is better or worse off than a year ago, showing present balance strength.
• Buying conditions for major durables: whether it is a good or bad time to buy furniture, a refrigerator, a stove or a television.

In June 2022 sentiment reached 50.0, down from 58.4 in May 2022 and 85.5 in June 2021. It was an all time low at the time, near the 1980 recession trough, under inflation and gas price pressure. The current conditions index reached 53.8, down from 63.3, on 72 for finances and 65 for buying, while expectations fell to 47.5 from 55.2.

Gas prices were named by 50% of consumers, against 30% in May 2022 and 13% in June 2021. Thus the present scored less badly than the future. In July 2022 current conditions rose to 58.1 on 75 and 73, while expectations sat at 47.3 and headline sentiment reached 51.5.

1. Relative score: For each question, subtract unfavorable from favorable shares, add 100 and round to the nearest whole number.

1. Index formula: Add the two scores and divide by 2.6424, the 1966 base period total, then add 2.0 as a design correction. An index value of 100 equals average 1966 conditions. For example, 72 and 65 sum to 137, and the division plus addition gives 53.8 as published.

1. Significance: A move of 6 points in the index and 4.8 in the headline marks significance at 95%, with no optimism cutoff or recession trigger. The formula is the full change with no seasonal adjustment step.