By Xavier Fontdegloria
Consumer confidence in the U.S. continued to decline in the second half of January after increasing in December, according to a University of Michigan survey released Friday.
The final reading of the index of consumer sentiment was 79.0 in January, slightly down from the flash estimate of 79.2 two weeks ago and from the 80.7 reading registered in December. Economists surveyed by The Wall Street Journal had expected the indicator to remain unchanged from its preliminary reading at 79.2.
Consumer confidence is 20.8% lower compared with the same month a year earlier, data showed.
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 level, said Richard Curtin, the survey's chief economist.
"The overall stability of consumer confidence has benefited from wearing masks and social distancing, the quick substitution of home for office work, and the prompt distribution of generous federal benefits," he said, adding that the level of key confidence indicators remained well above prior cyclical lows despite the sudden historic collapse in economic activity.
Consumers' assessment of the current economic conditions fell to 86.7 in January from 90.0 in December, and decreased from the flash reading of 87.7 two weeks ago.
The index of consumer expectations--which reflects the balance of respondents anticipating improved business conditions in the next six months--declined to 74.0 from 74.6 the prior month, but rose slightly from the 73.8 preliminary estimate.
"Despite continuing job and income disparities, as precautionary motives begin to ease, accumulated savings will spark a significant gain in spending in late 2021," Mr. Curtin said.
In contrast to the reduced levels but relatively stable trends in consumers' economic expectations, partisan views have remained quite volatile.
In the past three months, the index of consumer expectations has jumped among Democrats to 91.8 in January from 68.6 in October, while among Republicans it has plunged to 51.4 in January from 96.4 in October, the report said.
The University of Michigan's gauge of sentiment figures compares with The Conference Board's consumer confidence indicator for the month, released on Jan. 26, which signaled a slight uptick in sentiment driven by consumers' more upbeat expectations for the economy and the jobs market.
Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com
Corrections & Amplificaitons
This was corrected at 10:35 a.m. ET because the original version incorrectly stated the month in the headline as the second half of December. The correct month is January.
(END) Dow Jones Newswires
01-29-21 1034ET
