Michigan Sentiment Index Decreased to 80.4 in January

Consumer confidence in the U.S. unexpectedly declined in January, a sign spending may take time to accelerate early this year.

The Thomson Reuters/University of Michigan preliminary index of sentiment fell to 80.4 from 82.5 in December. Economists in a Bloomberg survey called for a reading of 83.5, according to the median estimate.

The report follows figures last week showing employment rose in December at the slowest pace in almost three years. While more job opportunities would help lift spirits, higher property values and rising equity prices are boosting household wealth and will keep consumers spending.

“There probably are some people who could have lost confidence based on what they read but I think the bigger driver is what people see day to day,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics Ltd. in Valhalla, New York, said before the report.

Estimates of the 67 economists in the Bloomberg survey ranged from 78 to 88. The index averaged 89 in the five years before December 2007, when the last recession began, and 64.2 in the 18-month contraction that ensued.

The Michigan sentiment survey’s current conditions index, which measures Americans’ view of their personal finances, fell to 95.2 in January from 98.6 a month earlier.

The index of expectations six months from now decreased to 70.9 from 72.1 last month.

….you can read more on Bloomberg Sentiment HERE (scroll down)