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Home Economy

Consumer Sentiment Remains Strong in January

January 31, 2020
Reading Time: 1 min read

Consumer Sentiment increased 0.5 points in January to 99.8, according to the University of Michigan Consumer Sentiment Index. January’s figure is 9.4 points above the January 2019 index. The Current Economic Conditions Index fell 1.0 point to 114.4. However, the reading was 5.1 points above the January 2019 index. The Consumer Expectations Index rose 1.8 points to 90.5 and was 13.3 points higher than a year ago.

“Consumer sentiment remained at very positive levels, with the January reading of 99.8 insignificantly below the cyclical peak of 101.4. The maintenance of consumer sentiment near cyclical peak levels is surprising given the overall slow pace of economic growth, which was accompanied in January by renewed military engagements in the Mideast, an impeachment trial in the Senate, and a fast spreading coronavirus. The resilience of consumers is remarkable and due to record low unemployment, record gains in income and wealth, as well as near record lows in inflation and interest rates,” said Richard Curtin, chief economist of UM Surveys of Consumers.

“Gains in personal finances were reported by 53% of all consumers in January, exactly equal to the 2018 and 2019 averages–the highest two years in the past half century. Combined net changes in household income and wealth were cited in 40% of all mentions in January, comparable to the 1966 and 2000 peaks (see the chart). The data currently point toward consumer spending maintaining positive growth in the economy as a whole. Nonetheless, as the presidential primaries begin, consumers will have to evaluate the impact on their own finances from the range of fundamental changes in tax and spending programs advocated by the various candidates.”

Read the University of Michigan Surveys of Consumers release.

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Author

Tyler Mondres

Tyler Mondres

Tyler Mondres is senior director of economic research at ABA and a frequent contributor on economic and fintech topics to the ABA Banking Journal.

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