U.S. Consumer Sentiment falls to 80.4 in January

Consumer Sentiment

Released On 1/17/2014 9:55:00 AM For Jan, 2014 Prior Consensus Consensus Range Actual Sentiment Index - Level 82.5  83.5  80.0  to 88.0  80.4

Highlights A slow start so far this year is the signal from consumer sentiment which is down 2.1 points to 80.4 for the mid-January reading. The current conditions component, which offers an indication on December-to-January activity, is down 3.4 points to 95.2. This suggests that consumer spending, which was solid in December based on retail sales, may not be adding to December's gain. The expectations component of the report is also down, 1.2 points lower to 70.9. This reading has been flat for nearly two years, often hovering in the high 60s area and unable approach 80 which is a level consistent with strong economic growth. Gas prices are tame and so are 1-year inflation expectations which are unchanged at 3.0 percent. Expectations for inflation 5 years out are at 2.9 percent, right in trend. The heavy weather that has hit much of the country so far this year may be behind the dip in this report, or it may be an effect from the weak jobs report early in the month. The Dow is little changed following today's report.

Market Consensus before announcement The Reuter's/University of Michigan's consumer sentiment index was unchanged at 82.5 for final December versus mid-month. But it was the comparison with final November's 75.1 that pointed to an especially good month for consumer spending in December. And there was also some momentum in the comparison between early December and later December, and it was in the current conditions component which rose to 98.6 from 97.9 earlier in the month and from 88.0 in final November. The latest was the best reading since July. Weakness in the latest report came in the less immediate component of expectations, which slipped 6 tenths from mid-month to 72.1. But decidedly favorable was the comparison with November's 66.8.

Source: Bloomberg