The Thomson Reuters/University of Michigan final index of consumer sentiment for January dropped to 74.2, revealing that consumers are concerned about rising prices beyond food and energy goods, according to the survey released Friday.
The index for December was unrevised at 74.5.
The index of consumer expectations, which polls consumers’ expectations in six months, increased to 69.3 from 67.5 in December. Consumers expressed optimism about employment growth. Just 22% of survey respondents said they think the unemployment rate will increase in 2011, the lowest level in more than a decade.
Consumers said they are worried about inflation diminishing their financial prospects.
“If rising global demand puts continued upward pressure on prices, inflation is likely to be the source of considerable discontent among consumers,” said Richard Curtin, the surveys of consumers chief economist, in a statement.
Core personal consumption expenditures increased by a record low in the fourth quarter of 2010 ending Dec. 31, the Commerce Department reported Friday. In its statement on monetary policy earlier this week, the Federal Open Market Committee said “commodity prices have risen” but that “measures of underlying inflation have been trending downward.”
The current conditions index, a survey of consumers’ willingness to buy big-ticket items, dropped to 81.8 from 85.3 in December.
