Questions and answers about the Reuters/University of Michigan Surveys of Consumers
Q. When will this agreement take effect?
A. The agreement will start Jan. 1, 2007. Until then, the Surveys will be released at the regular times and in the regular way.
Q. What will change when this agreement goes into effect?
A. There will be three significant changes. The name of the Survey will now be the Reuters/University of Michigan Surveys of Consumers. In addition, the distribution method will change, with Reuters becoming the exclusive distributor of the survey results. Instead of distributing the monthly data to a collection of individual sponsors, however, Reuters will exclusively distribute the headline survey index numbers widely to the public, via its news service and media services. Sponsors will continue to receive the detailed survey results. Thirdly, Reuters will distribute the mid-month, preliminary headline survey index numbers to the public and news media, with sponsors receiving mid-month detail as well.
The content of the surveys and the manner in which they are conducted are not affected by this agreement. U-M economist Richard Curtin will continue to direct the survey, as he has done since 1976.
Q. Why is this change taking place?
A. In the past few years, with the support of U-M officials, the ISR has been exploring alternative funding options for the Surveys of Consumers that would safeguard the independence and integrity of the research while also increasing timely access to the index numbers and providing reliable financial support for this valuable time-series that has monitored consumer attitudes on a continuous basis since 1946.
This agreement establishes a stable source of funding for this important survey and also provides greater transparency and disclosure of the survey results. The new media partnership and distribution model via Reuters will allow all investors to have the same access to the key index figures.
Q. What does this agreement mean for those who are now sponsors of the monthly surveys?
A. After Jan. 1, 2007, current sponsors of the surveys will be able to obtain the same detailed information they now receive through Reuters, rather than through the University of Michigan.
Q. When will other news media and the public obtain the data?
A. The closely followed index numbers from the surveys will be released to the public and to other news media simultaneously within an hour of their receipt by Reuters.
Q. Are other academic research projects funded by corporations rather than federal agencies or foundations?
A. Partnerships between research institutions and corporations, including news media, are increasingly common in a funding environment in which federal research support is at a premium. These arrangements are commonplace in medical, engineering and physical sciences research and are becoming more frequent in the social sciences.
Q. What are the major highlights of the agreement?
A. The agreement takes effect January 1, 2007. It changes the survey name to the Reuters/University of Michigan Surveys of Consumers and gives Reuters the right to exclusive distribution of the findings. The term of the agreement is three years, renewable in perpetuity for three-year periods. Either party can terminate the agreement with two years notice. U-M remains responsible for the conduct of the survey and the substance of the data. Professor Curtin will continue to report on the basic indices in a monthly press release as he now does. This release will be distributed by Reuters to other news media and directly to the public.
Q. Why is the U-M Surveys of Consumers so valuable to the public and the financial community?
A. The Surveys are influential in public policy and business circles because of their demonstrated ability to provide an accurate gauge of consumer anticipation of changes in the economic environment. One part of the surveys – the Index of Consumer Expectations – is an official component of the U.S. Index of Leading Economic Indicators. Because the surveys have been conducted since 1946, they provide a long-term look at economic trends as well as current economic information.
Q. What kind of information do the Surveys include?
A. The survey consists of 30 core questions that accurately assess how a nationally representative sample of 500 U.S.consumers feel about their current financial situation and about their future economic prospects. In addition, each monthly survey includes special question modules designed to assess public attitudes about a wide range of topics.
Q. Exactly what information will be provided to the public and other news media?
A. They will receive information on the Index of Consumer Sentiment; the Index of Consumer Expectations; the Index of Current Economic Conditions; the Expected Year-Ahead Inflation Rate; and the Expected Five-Year Inflation Rate, along with Professor Curtin’s interpretations of these index numbers.
Q. What additional information will subscribers of the data receive?
A. They will receive additional detail from the survey, including information on how consumers view their current financial situation compared to a year ago, how consumers expect their financial situation to change, and what changes they expect in unemployment and interest rates. They will also receive information on what consumers see as buying conditions for houses, large household goods and cars, in addition to other data.