Gains in Consumers’ Personal Finances Highest in Half Century, Matching 2018-2019 Averages
The Survey of Consumers final Consumer Sentiment Index for January inched even higher from 99.3 in December to 99.8, beating the consensus forecast and an improvement from the preliminary reading.
Forecasts for the Consumer Sentiment Index ranged from a low of 99.0 to a high of 100.0. The consensus forecast was 99.1, marring the preliminary reading released mid-month.
“The resilience of consumers is remarkable and due to record low unemployment, record gains in income and wealth, as well as near record lows in inflation and interest rates,” Surveys of Consumers chief economist, Richard Curtin said.
“Gains in personal finances were reported by 53% of all consumers in January, exactly equal to the 2018 and 2019 averages—the highest two years in the past half century.”
The Current Economic Conditions fell slightly from 115.5 in December and 115.8 in the preliminary reading to 114.4 in January. The Index of Consumer Expectations rose slightly from 88.9 last month and from the preliminary reading of 88.3 to 90.5.
That’s a reversal from the preliminary readings for both subindexes.
Combined net changes in household income and wealth were cited in 40% of all mentions in January, comparable only to the 1966 and 2000 peaks).
The data currently point toward consumer spending maintaining positive growth in the economy as a whole.
Nonetheless, as the presidential primaries begin, consumers will have to evaluate the impact on their own finances from the range of fundamental changes in tax and spending programs advocated by the various candidates,” Mr. Curtain added.
The preliminary reading for the Survey of Consumers Consumer Sentiment Index is scheduled to be released on Friday, February 14, 2020 at 10:00 AM EST.