A report from the University of Michigan revealed on Friday the
preliminary reading for the Reuters/Michigan index of consumer sentiment fell
2.5 percent m-o-m to 68.8 in early January. This was the second-lowest reading
since November 2011 (63.7; in November 2021 the index declined to 67.4).
Economists had expected the index would come in at 70.0 this month, slightly
down from December’s final reading of 70.6.
According to the report, the index of current U.S. economic conditions decreased
1.3 percent m-o-m to 73.2 in this month. Meanwhile, the index of consumer
expectations plunged 3.5 percent m-o-m to 65.9.
Surveys of Consumers chief economist, Richard Curtin, noted that “a small
loss” in consumer sentiment in early January was due to worries about rising Delta
and Omicron variants, as well as an escalating inflation rate. The estimates of year-ahead
expected inflation rose to 4.9 percent in January from 4.8 percent in the
previous month, while the 5-year expected inflation increased to 3.1 percent
from 2.9 percent in December.