The University of Michigan preliminary consumer sentiment index for January rose to an 11-year high of 98.2, helped by a strengthening job market and lower fuel costs.
The preliminary reading was the highest since January 2004, and up from a final reading of 93.6 in December. The median estimate in a Bloomberg survey of 70 economists projected an increase to 94.1.
The median estimate in a Bloomberg survey of 70 economists projected an increase to 94.1. The index averaged 84.1 last year.
“Consumer confidence rose in early January to its highest level in a decade,” said Chief economist, Richard Curtin. “Gains in employment and incomes as well as declines in gas prices were cited by record numbers of consumers. More consumers spontaneously cited increases in their household incomes in early January than anytime in the past decade, and more households reported unprompted references to favorable employment prospects as well as lower prices than at any other time in the more than the half-century history of the surveys. While it may be true that consumers have allowed the confluence of more jobs, higher wages, and lower gas prices to fuel a run-up in optimism that may be hard to sustain in the months ahead, even a small retrenchment would have little impact on an expected gain of 3.0 percent in real consumer expenditures in 2015.”
