U.S. Consumer Sentiment Falls But Remains Near Decadelong High -- Update
February 24 2017 - 11:23AM
Dow Jones News
By Austen Hufford
A gauge of consumer sentiment fell slightly in February, but
remained near a decadelong high, as self-identified Republicans and
Independents remain confident in the economy after the election of
Donald Trump.
Still, the survey remains divided along partisan, political
lines. Self-identified Democrats expect a recession while
Republicans expecting robust growth. The recent rise in optimism,
which saw a boost after Mr. Trump's election in November, reflects
a turnaround from consumers' attitudes in October, when sentiment
had matched a two-year low.
The University of Michigan said Friday that its final reading of
consumer sentiment was 96.3 in February, up from its preliminary
reading of 95.7 earlier this month but down from January's final
reading of 98.5. It is up 5% from February 2016.
Economists surveyed by The Wall Street Journal had expected a
February reading of 96. The index's three month average is at the
highest it has been for nearly 13 years.
A rise in consumer expectations is largely being driven by
Independents as the polarized views of Republicans and Democrats
largely offset each other. The forward-looking index of consumer
expectations is up 5.6% from February a year ago and up 13% from
October.
Independents are "closer to the optimism of the Republicans than
the pessimism of the Democrats," Survey Chief Economist Richard
Curtin said. "Since neither recession nor robust growth is expected
in 2017, both extremes must eventually converge."
The index reflecting sentiment on current economic conditions
rose 4.4% from February last year.
Inflation expectations for the next year increased, according to
the survey released Friday. Consumers said they expect inflation of
2.7% in the coming 12 months, up from their January expectation of
2.6%.
The longer-term inflation outlook fell, with consumers expecting
2.5% over the next five years, down from their prior-month estimate
of 2.6%.
Write to Austen Hufford at austen.hufford@wsj.com
(END) Dow Jones Newswires
February 24, 2017 11:08 ET (16:08 GMT)
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