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Friday, January 31, 2014

Final January Consumer Sentiment at 81.2, Chicago PMI at 59.6

by Calculated Risk on 1/31/2014 09:55:00 AM

Consumer Sentiment
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• The final Reuters / University of Michigan consumer sentiment index for January decreased to 81.2 from the December reading of 82.5, but up from the preliminary January reading of 80.4.

This was just above the consensus forecast of 81.0. Sentiment has generally been improving following the recession - with plenty of ups and downs - and a big spike down when Congress threatened to "not pay the bills" in 2011, and another smaller spike down last October and November due to the government shutdown.

I expect to see sentiment at post-recession highs very soon.

• From the Chicago ISM:

January 2014:

The Chicago Business Barometer softened to 59.6 in January from a revised 60.8 in December, the third consecutive monthly fall following October’s jump to the highest since March 2011. In spite of January’s slower rate of expansion, the Barometer remained firm and consistent with the recent pick-up in GDP.
Commenting on the MNI Chicago Report, Philip Uglow, Chief Economist at MNI Indicators said, “Business activity continued to ease in January but remained at a relatively high level. Production and New Orders remained firm, and while Employment fell back into contraction, this doesn‘t appear to be indicative of current demand conditions.”

“There have been concerns that putting the brakes on monetary easing could damage business. Most respondents, though, thought that the Federal Reserve’s decision to begin tapering their bond purchases in December would not have a significant impact on their business”, he added
This was close to the consensus estimate of 59.5.