U.S. Consumer Sentiment Drops Slightly More Than Initially Estimated In January
Consumer sentiment in the U.S. decreased by slightly more than
initially estimated in the month of January, according to revised
data released by the University of Michigan on Friday.
The report said the consumer sentiment index for January was
downwardly revised to 79.0 from the preliminary reading of
Economists had expected the consumer sentiment index to be
unrevised from the preliminary reading, which was still down from
80.7 in December.
"The overall level of the Sentiment Index has shown only
relatively small variations since the pandemic started, averaging
81.5 in 2020, marginally above January's 79.0," said Surveys of
Consumers chief economist Richard Curtin, who acknowledged levels
are well below the average of 97.0 from 2017 to 2019.
He added, "Importantly, the level of key confidence indicators
remained well above prior cyclical lows despite the sudden historic
collapse in economic activity."
Curtin credited mask wearing and social distancing, the quick
substitution of home for office work, and the prompt distribution
of generous federal benefits for the overall stability of
"Although the nation is still being ravished by the pandemic,
and the nation's cooperative reactions have been far from perfect,
consumers have helped to dissipate the potential for further harm,"
He continued, "Despite continuing job and income disparities, as
precautionary motives begin to ease, accumulated savings will spark
a significant gain in spending in late 2021."
The report said the current economic conditions index fell to
86.7 in January from 90.0 in December, while the index of consumer
expectations edged down to 74.0 from 74.6.
On the inflation front, one-year inflation expectations jumped
to 3.0 percent in January from 2.5 percent in December and
five-year inflation expectations rose to 2.7 percent from 2.5
The Conference Board released a separate report on Tuesday
showing an unexpected improvement in U.S. consumer confidence in
the month of January, reflecting an increase in optimism about the
short-term economic outlook.
The Conference Board said its consumer confidence index climbed
to 89.3 in January from a downwardly revised 87.1 in December.
The increase surprised economists, who had expected the index to
edge down to 88.5 from the 88.6 originally reported for the
"Consumers' appraisal of present-day conditions weakened further
in January, with COVID-19 still the major suppressor," said Lynn
Franco, Senior Director of Economic Indicators at the Conference
She added, "Consumers' expectations for the economy and jobs,
however, advanced further, suggesting that consumers foresee
conditions improving in the not-too-distant future."