Consumer Sentiment Declines in January: Reuters/UoM
US consumer confidence declined marginally in January, a sign broader economic growth may not be enough to keep consumer spending elevated at the start of 2014.
The consumer sentiment index, courtesy of Thomson Reuters/University of Michigan, slipped from 82.5 to 81.2 in January. The January reading follows the biggest monthly gain in three years. A separate consumer confidence gauge released Tuesday by the Conference Board showed sentiment improved in January for the second straight month.
While confidence levels remained elevated for wealthy Americans, low- and middle-income households reported a decrease. The survey’s gauge of current economic conditions fell from 98.6 to 96.8, while the gauge of consumer expectations dipped from 72.1 to 71.1.
“Prospects for either consumers’ own personal finances or for the economy as a whole have remained more resistant to improvement, especially longer term prospects,” said survey director Richard Curtin in an official statement. “This has prevented recent economic gains from building the type of positive upward momentum that has sparked and sustained increases in consumer optimism and confidence.”
A separate report from the Commerce Department showed personal spending increased 0.4 percent last month, exceeding forecasts. Personal incomes, however, went unchanged in December, which means consumers will likely scale back on spending over the short-haul. Disposable, after-tax income decreased 0.2 percent in December, the biggest drop in eleven months.
Consumer spending was a lynchpin of economic growth in the final three months of 2013, the Commerce Department said yesterday. The US economy accelerated 3.2 percent annually in the fourth quarter, thanks to holiday spending and business investment.
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