A report from
the University of Michigan showed on Friday that the preliminary reading for
the Reuters/Michigan index of consumer sentiment climbed 13.1 per cent m-o-m to
78.8 in early January 2024. This marked the highest reading
since July 2021 (81.2).
Economists had predicted
the indicator would increase to 70.0
this month from the December 2023
final reading of 69.7.
According to
the report, the index of current economic conditions soared 13.9 per cent m-o-m
to 83.3 in January, while the index of consumer expectations surged 12.6 per
cent m-o-m to 75.9.
The report also
revealed that the estimates of year-ahead expected inflation dropped from 3.1
per cent in December to 2.9 per cent early this month, the lowest level since December
2020 (2.5 per cent). Meanwhile, the 5-year expected inflation fell
from 2.9 per cent to 2.8 per cent, the lowest level since September 2023(2.8
per cent).
Commenting on
the latest findings, Surveys of Consumers Director Joanne Hsu said that consumer
views were supported by confidence that inflation has turned a corner and
strengthening income expectations. “Over the last two months, sentiment has climbed a cumulative
29%, the largest two-month increase since 1991 as a recession ended,” she
added.