2019.02.0111:12:00UTC+00U.S. Consumer Sentiment Deteriorates Slightly Less Than Initially Estimated

Reflecting the end of the prolonged government shutdown, the University of Michigan released a report on Friday showing consumer sentiment in the U.S. dropped by slightly less than initially estimated in the month of January.

The report said the consumer sentiment index for January was upwardly revised to 91.2 from the preliminary reading of 90.7. Economists had expected the index to be upwardly revised to 90.8.

Despite the bigger than expected upward revision, the index is still down sharply from the final December reading of 98.3.

Surveys of Consumers chief economist Richard Curtin noted the index remained at its lowest level since President Donald Trump was elected, as the end of the shutdown provided only a modest boost.

"The typical impact of such 'crisis' events is short lived, with consumers quickly regaining lost confidence," Curtin said. "That is unlikely to occur this time as the deadline for resolution has only been extended until mid February."

He added, "If the standoff continues into late February, it could foster sustained declines in economic optimism among consumers."

The report said the current economic conditions index slumped to 108.8 in January from 116.1 in December, while the index of consumer expectations plunged to 79.9 from 87.0.

On the inflation front, one-year inflation expectations came in unchanged at 2.7 percent, but five-year inflation expectations ticked up to 2.6 percent in January from 2.5 percent in December.