U.S. Consumer Confidence Shows Signs of Weakness, Inflation Expectations Hold Most Gains Since Election
The University of Michigan's consumer confidence survey at the end of January showed some signs of weakness, with the overall index dropping to 71.1 from an initial reading of 73.2 earlier in the month and 74.0 at the end of December, the lowest level since the pre-election period (70.5 in October), suggesting more skepticism as a new administration is about to take office. The fact that inflation expectations have extended much of their rise since the election may also have something to do with this. Median inflation expectations for the year were unchanged from January's initial reading of 3.3%, up from 2.8% in December and 2.7% in October. Five-year interest rate expectations fell to 3.2% from 3.3% at the start of the month, but remained above the 3.0% of last December and October and the highest month-end rate since mid-2008.
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