U.S. Consumer Sentiment Falls Less Than Forecast Amid Shutdown
(Bloomberg) -- U.S. consumer sentiment fell by less than
forecast after the longest government shutdown in American
history, suggesting the impact of the closure may be abating.
The University of Michigan’s final January sentiment index fell
to a two-year low of 91.2, though that was higher than the
forecast in a Bloomberg survey that had called for the reading
to be unchanged from the preliminary reading of 90.7. The
measure of current conditions was weaker than the initial
reading while the expectations gauge strengthened somewhat.
- Confidence remains relatively elevated compared with historical levels, though it's at the lowest since President Donald Trump was elected. The gauge may recover in coming months as the government returns to business after the five- week closure.
- “While consumers became somewhat more optimistic about the outlook for the national economy, they viewed current economic conditions slightly more negatively due to the worse-than- anticipated impact of the shutdown on the economy,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement. “The typical impact of such ‘crisis' events is short lived.”
- Expected income gains for the year ahead matched the average during the past year.
- A measure of buying conditions for long-lasting goods was the weakest in five months, while gauges measuring attitudes about the economic outlook in the next year and five years slumped.
- Consumer expectations for inflation in the year ahead held at 2.7 percent, unchanged from the prior month and a year earlier. The inflation rate over the next five to 10 years was seen at 2.6 percent, up from 2.5 percent a month and a year earlier.
- Interviews for the report were conducted Jan. 2-28. The shutdown ended Jan. 25.
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