Consumer Sentiment was 64.6 in January, according to the University of Michigan Consumer Sentiment Index. January’s figure was 4.9 points above Novembers reading and is 2.6 points below the January 2022 index. The Current Economic Conditions Index rose 9.2 points from the previous month to 68.6 and is 1.4 points below the January 2022 index. The Consumer Expectations Index increased by 2.1 points to 62.0 and is 2.1 points lower from a year ago.
“Consumer sentiment remained low from a historical perspective but continued lifting for the second consecutive month, rising 8% above December and reaching about 4% below a year ago. Current assessments of personal finances surged 16% to its highest reading in eight months on the basis of higher incomes and easing inflation. Although the short-run economic outlook fell modestly from December, the long-run outlook rose 7% to its highest level in nine months and is now 17% below its historical average”.
“Year-ahead inflation expectations receded for the fourth straight month, falling to 4.0% in January from 4.4% in December. The current reading is the lowest since April 2021 but remains well above the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations were little changed from December at 3.0%, again staying within the narrow 2.9-3.1% range for 17 of the last 18 months. Long-run inflation expectations remain elevated relative to the 2.2-2.6% range seen in the two years pre-pandemic. Uncertainty over both inflation expectations measures remains high, and changes in global factors in the months ahead may generate a reversal in recent improvements”.
Read the University of Michigan Surveys of Consumers release.