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U of M Sentiment (Jan. F) 92 vs 93 Expected

January 29, 2016 10:00 AM EST

U of M Sentiment (Jan. F) 92 vs 93 Expected

Final Results for January 2016
JanDecJanM-MY-Y
201620152015ChangeChange
Index of Consumer Sentiment92.092.698.1-0.6%-6.2%
Current Economic Conditions106.4108.1109.3-1.6%-2.7%
Index of Consumer Expectations82.782.791.0+0.0%-9.1%

Next data release: February 12, 2016 for Preliminary February data at 10am ET

Surveys of Consumers chief economist, Richard Curtin

Consumer confidence has remained largely unchanged, as the January reading was just 0.6% below last month's level. The small downward revisions were due to stock market declines that were reflected in the erosion of household wealth, as well as weakened prospects for the national economy. The interviews conducted from last Friday until early this week provide no evidence that the East Coast blizzard influenced the data. To be sure, the overall level of confidence is below last January's peak, but thus far, the decline amounts to just 6.2%, indicating slower growth, not a recession in 2016. Consumers anticipate that the growth slowdown will be accompanied by smaller wage gains and slight increases in unemployment by the end of 2016. Importantly, favorable financial prospects have become dependent on very low inflation. The Fed's success at pushing the inflation rate higher may well exceed wage gains, thus erasing a critical strength in consumers' financial expectations. Consumers will actively demonstrate their resistance by moderating their purchases in the face of price hikes, thus acting to offset the Fed's rationale for higher rates.


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