Wide Discrepancy In Current & Future Sentiment Readings

The sentiment reading from the University of Michigan and Reuters survey came in at 74.0 for the preliminary figure.  This is a gain from the 69.9 final reading of December and is still above the Bloomberg consensus reading of 71.5.  Be advised that the highest estimate out there was actually 80.0, so some may even be disappointed.

What is different about this reading is that the current index component and the expectations component are very far apart.  The current index was 82.6, but the expectation component was all the way down at 68.4 for the preliminary figure.

This wide disparity will likely smooth out in two weeks when the final January data comes out.  Still, that shows that everyone is confident today and not anywhere as confident in the future.

Keep in mind that many feel this figure is not representative enough of a sample to be valid.  The University of Michigan’s Consumer Survey Center questions 500 households each month for this reading to survey their financial conditions and to measure the overall attitudes about the economy. 

JON C. OGG