U.S. consumer sentiment was relatively flat in January, but still hit its highest level in 11 years, according to the Thomson Reuters/University of Michigan survey. The final January reading on the overall index on consumer sentiment hit 98.1, which is its best showing on a final basis since January 2004.
The report is the latest show of gains in consumer sentiment since August.
“Consumers judged prospects for the national economy as the best in a decade, with half of all consumers expecting the economic expansion will continue for another five years,” said Richard Curtin, the survey’s director.
The reading was up from 93.6 the month before but slightly under the preliminary reading of 98.2, which was also the median forecast of among economists polled by Reuters. The survey’s barometer of current economic conditions rose to 109.3 from 104.8 in December, compared to a forecast of 108 and a preliminary reading of 108.3.
“While renewed strength in consumer spending will boost the pace of economic growth in 2015, most consumers are counting only on modest income gains during the years ahead. Without sufficient wage gains, consumers will be forced to demand large price discounts to complete their purchases, adding to disinflationary pressures.”
The survey’s gauge of consumer expectations increased to 91 from December’s reading of 86.4, but it was below the preliminary January of 91.6. Economists’ expectations were for a reading of 91.5. The survey’s one-year inflation expectation was 2.5 percent, compared with 2.8 percent in December.
