Consumer sentiment hits highest level since 2021

Consumer sentiment rose in January to its highest level since July 2021, according to the University of Michigan Consumer Survey released Friday.

In preliminary figures, sentiment rose from 69.7% in the previous month to 78.8, marking the second consecutive month of significant increases.

“Democrats and Republicans alike posted their best indicators since summer 2021. Sentiment is now nearly 60% above the all-time low measured in June 2022, providing positive momentum for the economy.” “Highly likely,” the consumer survey said.Director Joan Hsu in a statement.

The rise in numbers reflects growing optimism about economic conditions as inflation eases, unemployment remains low and wages continue to rise.

President Biden struggled throughout 2023 to convince Americans about the state of the economy after more than two years of high inflation. How voters feel about the economy is likely to be a rematch between Biden and former President Trump, who last week predicted the economy would collapse and hope it will do so under a Biden administration. A rematch with former President Trump, who has said, could have a big impact.

According to pollsters at Hill/Decision Desk, early polls show Trump leading Biden by a narrow margin.

“A huge uptick in consumer sentiment, blowing away expectations,” said Bharat Ramamurti, a former deputy director of the Biden administration's National Economic Council who recently joined the American Economic Freedom Project. I wrote to Xthe platform formerly known as Twitter.

“In 2024, we will see several rate cuts, continued employment and wage growth, and inflation at or near global levels.” [Federal Reserve’s] The goal is to only push sentiment higher. ”

The Fed has signaled it intends to cut interest rates this year unless inflation picks up again.

Fed Governor Christopher Waller, who holds a vote on the Fed's rate-setting committee, said in remarks Tuesday at a Brookings Institution virtual event that he is “increasingly confident that the central bank's 2% annual inflation target is within range.” ” .

“Unless inflation recovers and remains high, I [Federal Open Market Committee] “This year we could lower the target range for the federal funds rate,” Waller said.