Consumer Sentiment Slid 2.1% to 79.0 in January
Ann Arbor, MI, January 29, 2021-Consumer sentiment slid 2.1% to 79.0 in January, according to final results from the University of Michigan Survey of Consumers.
This represents a 20.8% decrease year over year.
“Consumer sentiment remained largely unchanged in the last half of January from earlier in the month,” says Survey of Consumers chief economist Richard Curtin. “Indeed, the overall level of the Sentiment Index has shown only relatively small variations since the pandemic started, averaging 81.5 in 2020, marginally above January's 79.0. Needless to say, Sentiment levels were well below the average of 97.0 from 2017 to 2019. Importantly, the level of key confidence indicators remained well above prior cyclical lows despite the sudden historic collapse in economic activity. The overall stability of consumer confidence has benefitted from wearing masks and social distancing, the quick substitution of home for office work, and the prompt distribution of generous federal benefits. These factors helped to absorb the pandemic's negative impact on the economy as well as on personal finances. Although the nation is still being ravished by the pandemic, and the nation's cooperative reactions have been far from perfect, consumers have helped to dissipate the potential for further harm. Despite continuing job and income disparities, as precautionary motives begin to ease, accumulated savings will spark a significant gain in spending in late 2021.”