Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Michigan Inflation Expectations Give Fed Time; Sentiment Rises

Published 02/15/2019, 10:00 AM
Updated 02/15/2019, 10:13 AM - U.S. consumer sentiment improved in February, recovering from a near-two-year low measured as the partial government shutdown increased worries about economic growth, while inflation expectations at a 50-year low gave the Federal Reserve more ammunition to keep rates on hold.

The preliminary publication of the data for February from the University of Michigan's Consumer Survey Center showed that the consumer sentiment index increased to 95.5 from 91.2 a month earlier.

Economists had forecast a rise to 93.3.

“The early February gains reflect the end of the partial government shutdown as well as a more fundamental shift in consumer expectations due to the Fed's pause in raising interest rates,” the surveyor’s chief economist Richard Curtin said.

The recovery marks a sharp contrast to recent economic data that has exacerbated concerns about an economic slowdown.

Data on Thursday showed that U.S. retail sales recorded their biggest drop in more than nine years in December. That came alongside an unexpected increase in the number of Americans filing claims for unemployment benefits last week, which pushed the four-week moving average of claims to a one-year high, an indication that job growth was moderating.

At the same time, inflation seemed to be held in check, with the consumer price index flat compared to the prior month and core readings holding steady, while the producer price index registered its second-consecutive drop month on month.

Along those lines, Curtin noted that the survey revealed that consumers' long-term inflation expectations fell to the lowest level recorded in the past half century.

“The data suggest that the Fed will find it even harder to justify another rate hike given the record low inflation expectations,” he added.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.