Consumer sentiment falls in January, while tax reform viewed with optimism

Key Points
  • U.S. consumer sentiment fell to 94.4 in January.
  • Economists polled by Reuters expected a rise to 97.
Consumer sentiment at weakest level since July

U.S. consumer sentiment fell in the January mid-month reading, moving further from the decade high reached in October.

The University of Michigan's survey of consumer attitudes for January slipped to 94.4, after falling to 95.9 in December. Economists polled by Reuters expected the reading to increase to 97.

The preliminary January reading saw consumers have a less favorable view of the current economic conditions than in December.

The survey's chief economist Richard Curtin noted that 34 percent of consumers spontaneously mentioned tax reform. Of those, 70 percent of consumers said the impact from the new tax reform law would be positive, while 18 percent said it would be negative.

"The disconnect between the future outlook assessment and the largely positive view of the tax reform is due to uncertainties about the delayed impact of the tax reforms on the consumers," Curtin said in a statement.

The measure soared to 101.1 on Oct. 13 — the highest level since 2004 — but has deflated steadily since.

The index measures 500 consumers' attitudes on future economic prospects, in areas such as personal finances, inflation, unemployment, government policies and interest rates.