Consumer Sentiment Increased in January to 13-Year High
Consumer confidence rose in January to a 13-year high, reflecting ongoing optimism about post-election fiscal policies and their impact on economic growth.
The University of Michigan said Jan. 27 that its final index of sentiment increased to 98.5 from 98.2 in December. The median projection in a Bloomberg News survey called for the measure to hold at its preliminary reading of 98.1.
While President Trump’s promises to grow the economy, cut taxes and create more job opportunities have propelled sentiment, attitudes ultimately will be defined economic improvement. The report showed 44% of respondents, the most since 2004, said they anticipate the economy improving this year, while 33% expected the unemployment rate to keep falling.
“Importantly, consumers reported much more positive assessments of their current financial situation due to gains in both incomes and household wealth, and anticipated the most positive outlook for their personal finances in more than a decade,” Richard Curtin, director of the consumer survey, said in a statement.
The gauge of expectations six months from now climbed to 90.3 from 89.5 in December and up from a preliminary January figure of 88.9.
Rising incomes and higher stock and home values helped shore up Americans’ views of their finances, the report said. Some 41%, the most since mid-2005, said they had a favorable outlook for their finances.
The current conditions index, which measures Americans’ perceptions of their personal finances, eased to 111.3 from 111.9 in the prior month. The preliminary reading was 112.5.
Respondents expected the inflation rate in the next year will be 2.6%, the highest since July. That compares with 2.2% in the December survey.
