US Consumer Sentiment Wanes in Late January to Decade-Low on Inflation Concerns
By Xavier Fontdegloria
Sentiment among U.S. consumers remained subdued in mid January,
deteriorating to a decade-low, as high inflation and the Covid-19
Omicron wave weighed on moods.
The final reading of the index of consumer sentiment compiled by
the University of Michigan was 67.2 in January, below the
preliminary estimate of 68.8 and down from 70.6 in December.
January's reading, which came in below the 68.5 expected by
economists, is the lowest since November 2011.
American consumers' primary concern is rising inflation and
falling real incomes, said Richard Curtin, the survey's chief
economist. Overall confidence in government economic policies is at
its lowest level since 2014, he said.
Consumers' expected inflation rates ticked up in January
compared with December. For the next year, Americans see prices
increasing 4.9% from an expected 4.8% the previous month, and for
the next five years they anticipate prices to rise 3.1% from
"Consumers may misinterpret the Fed's policy moves to slow the
economy as part of the problem rather than part of the solution,"
Mr. Curtin said. There is a danger that consumers overreact to the
Fed moves, especially given the uncertainties about the coronavirus
and other geopolitical risks, he said.
In January, the index measuring Americans' assessment of the
current economic conditions fell to 72.0 from 74.2 in December. The
preliminary early-month reading came in at 73.2.
The index of consumer expectations, which reflects the balance
of respondents anticipating improved business conditions in the
next six months, decreased to 64.1 from 68.3 in December, and also
declined compared with the preliminary estimate of 65.9.
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires
January 28, 2022 10:29 ET (15:29 GMT)
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