In January, consumer psychology declined for the first time in six months, causing inflation concerns and rapid recognition of Democratic voters to decline.
The Michigan University centment index was 71.1, a lower level in three months from 74 in December in December. The depression was more remarkable than the preliminary value shows, highlighting the anxiety about economic orbitals.
Consumers reported that their personal financial conditions had improved and said that their income had increased. However, evaluations on business conditions, labor markets, and economic growth were sluggish.
According to a statement, Joan Sue said, “The evaluation of personal financial status has gradually increased for five consecutive months, but all other index components have retreated.”
Democratic feelings have dropped from 69.6 to 63.8, and the current economic situation has plummeted from 98.9 to 86.9. Democratic supporters' expectations have fallen to 48.9, decreased from 50.8 in December, and dropped significantly from 93.1 in October. This 47% decrease cannot be explained by the actual changes in the current economic situation. Rather, this greatly reflects that the Democratic Party is dissatisfied with the results of the presidential election.
In contrast, the Republican approval rating has slightly rose from 85.4 to 86.0 due to improvement of the view of the current situation, rising from 52.0 to 57.5. Republican supporters' expectations have fallen from 106.8 to 104.4. The results of the non -partisan groups vary, and the overall centements were reduced from 70.2 to 67.9, and the expectations were reduced from 69.5 to 64.4, but the current indicator improved from 71.4 to 73.3.
Inflation expectations and consumer behavior
Inflation is still the biggest concern for consumers. Long -term inflation expectations rose from 3.2 % to 3 % in December, and short -term expectations were 3.3 %, high since May. Some consumers reported that they were purchasing products in advance to avoid future prices, highlighting their anxiety about increased costs.
According to Sue, inflation concerns are increasing due to tariff prospects. Despite warning that the dominant media and many anti -related tax economists have warned that new imports can increase prices, most economists believe that customs duties may cause permanent inflation pressure. There is. The Trump administration hopes that some of the price pressure will be offset due to a decline in energy costs, but consumers are still alert to the possibility of confusion.
Despite the progress of the stall stalls, the Fed's decision, which decided to decide to drop three times last year, is likely to fuel concerns about relapse of price pressure. The Fed is expected to suggest a suspension of interest rate at the next meeting.
Concerns in the labor market become more serious, and housing stress continues
Almost half of consumers (47 %) expect the unemployment rate next year to rise, which is the highest level of concerns since the pandemic recession. Despite the fact that the increase in income is steady, concerns about employment stability are increasing. The Trump administration has reported in telegrams that impose the federal employment freezing and reduce government officials.
This report reflects a strong issue in the housing market. The purchase conditions for durable goods have softened, and the percentage of those who answered that it is a bad time to buy a house has continued to rise. According to another data announced by the US Real estate agent association on Friday, the number of used houses has decreased to 4.06 million in 2024, the lowest in 1995.
Economic gaps reflect political polarization
The gap between party factions in economic psychology has expanded significantly. Democratic's decline in trust has highlighted a remarkable contrast with the Republican Party, who does not lose its optimistic posture on the current situation, despite its slightly retreat. This polarization highlights the wide range of issues faced by governments that try to deal with economic concerns while overcoming deep grooves on ideology.
With inflation and the uncertainty of the labor market continued, the January sentiment report reflects the rise of consumers' anxiety and the economic outlook of political colors. The Trump administration's policy response for the next few months will form both market mechanics and the trust of the people.
