U.S. Consumer Sentiment Shows Unexpected Drop In January

(RTTNews) - Consumer sentiment in the U.S. unexpectedly deteriorated in the month of January, according to a report released by Thomson Reuters and the University of Michigan on Friday.

The report said the consumer sentiment index fell to 80.4 in January from 82.5 in December. The drop came as a surprise to economists, who had expected the index to climb to 83.5.

Reuters said the decrease by the consumer sentiment index reflected lowered expectations among lower- and middle-income families.

Meanwhile, Rob Carnell, chief international economist at ING, said, "With the labor market probably in far better shape than the latest labor report suggested, the stock market remaining robust, house prices rising strongly and gasoline prices relatively low, there is no good reason for the dip."

"At any rate, 80.4 is not a bad level, and consistent with spending growth remaining at the sort of levels seen in recent quarters," he added.

The unexpected decrease by the headline index came as the barometer of current economic conditions dropped to 95.2 in January from 98.6 in December. The gauge of consumer expectations also dipped to 70.9 from 72.1.

On the inflation front, one-year inflation expectations were unchanged at 3.0 percent, while the five-to-ten-year inflation outlook rose to 2.9 percent from 2.7 percent.