According to our analysis USDJPY and EURUSD moved 20 pips on University Michigan Consumer Sentiment / Inflation Expectations data on 19 January 2024.

USDJPY (13 pips)

EURUSD (7 pips)

Charts are exported from JForex (Dukascopy).

The preliminary results for January 2024 from the Surveys of Consumers indicate a significant improvement in consumer sentiment in the United States. Here are some key highlights from the data:

  1. Index of Consumer Sentiment: This index saw a notable increase, rising to 78.8 in January 2024 from 69.7 in December 2023, which is a 13.1% monthly increase and a 21.4% increase compared to January 2023.

  2. Current Economic Conditions: This metric also showed improvement, increasing to 83.3 in January 2024 from 73.3 in December 2023, marking a 13.6% rise month-over-month and a 21.6% rise year-over-year.

  3. Index of Consumer Expectations: It rose to 75.9 in January 2024, up from 67.4 in December 2023, reflecting a 12.6% increase month-over-month and a 21.2% increase year-over-year.

  4. Consumer Sentiment Dynamics: The report highlights that consumer sentiment has significantly risen, reaching its highest level since July 2021. This improvement is attributed to increased confidence in inflation control and strengthening income expectations. Over the last two months, sentiment has seen the largest two-month increase since 1991, signaling a robust recovery from the all-time low in June 2022.

  5. Broad-Based Improvement: The improvement in consumer sentiment is noted across various demographics including age, income, education, and geography. Both Democrats and Republicans showed their most favorable readings since summer of 2021.

  6. Inflation Expectations: The year-ahead inflation expectations have decreased to 2.9%, the lowest since December 2020. Long-term inflation expectations have also edged down to 2.8%. These figures are slightly higher than the pre-pandemic levels but show a trend towards stabilization.

  7. Economic Outlook: The report suggests that the increase in consumer sentiment is likely to provide positive momentum for the economy. The sentiment is now approaching the historical average since 1978, being just 7% shy of it.

This data reflects a positive trend in consumer confidence, which is crucial for economic growth as it often leads to increased consumer spending. The softened inflation expectations indicate a stabilization in the economic outlook, which could positively impact various sectors of the economy.

Source: http://www.sca.isr.umich.edu

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