The final
reading for the January 2024 Reuters/Michigan index of consumer sentiment came
in at 79.0 compared to the flash reading of 78.8 and the December 2023 final
reading of 69.7. This was the highest reading since July 2021 (81.2).
Economists had predicted
the indicator to be revised slightly up to 78.9.
The details of
the latest Surveys of Consumers of the University of Michigan revealed that the
index of current economic conditions jumped 1.7 per cent m-o-m to 81.9 this
month, while the index of consumer expectations climbed by 14.4 per cent m-o-m
to 77.1.
The report also
showed that the year-ahead inflation expectations declined from 3.1 per cent in December to 2.9 per cent in January,
in line with the preliminary estimates. This was the lowest
reading since December 2020 (2.5 per cent). Meanwhile, the 5-year inflation
expectations remained unchanged at 2.9 per cent compared to the preliminary estimate of
2.8 per cent.
Commenting on
the latest results, Joanne Hsu, Surveys of Consumers Director, said that consumer
sentiment confirmed its early-month reading, surging 13% to reach its highest
level since July 2021, reflecting improvements in the outlook for both
inflation and personal incomes. “January's gain has been exceeded only five
times since 1978, one of which was last month at an even larger increase of
14%,” she noted.