Anxious consumers hopeful on vaccines and Biden stimulus, sentiment survey shows

Anxious consumers hopeful on vaccines and Biden stimulus, sentiment survey shows

The numbers: Consumer attitudes toward the economy stabilized in early January as anxious Americans grew more hopeful about coronavirus vaccines and the prospect of more federal aid from President-elect Joe Biden.

The first of two reading of consumer sentiment this month fell just slightly to 79.2 from 80.7 in December, according to an index produced by the University of Michigan.

Economists polled by Dow Jones/Wall Street Journal had forecast the index to slip to 79.4.

The index is still more than 20 points below its precrisis peak.

Read: Consumer inflation increases in December on higher gas prices

What happened: An index that measures how consumers feel about the economy right now dropped to 87.7 from 90.0 last month.

Similarly, an index that measures consumer expectations for the next six months edged down to 73.8 from 74.6.

” Two offsetting shifts helped narrow the January loss in sentiment: the covid-19 vaccines and a partisan shift in expectations due to the anticipated impact of Biden’s economic policies,” said Richard Curtin, chief economist of the survey.

Read: Jobless claims surge to 5-month high of 965,000

Also: The U.S. lost 140,000 jobs in December. How bad was it?

Big picture: An unprecedented wave of coronavirus cases and resulting deaths have put another big dent in the economy. Many states have reimposed business restrictions and companies laid off more workers.

Washington approved more aid for the economy last month and Biden is promising up to $2 trillion in additional spending. That will help in the short run.

Far more important is the rollout of coronavirus vaccines. It’s been slow going so far, but the pace is expected to pick up. The rebound in the economy is likely to track the growing availability of vaccines.

Read: U.S. businesses grow faster despite coronavirus spike

What they are saying? “The big picture is that confidence has been more or less trending sideways since the big fall last spring,” said U.S. economist Andrew Hunter of Capital Economics “A full recovery in consumption will depend on the resolution of pandemic, which is unlikely to come for another few months at least. “

Market reaction: The Dow Jones Industrial Average

and S&P 500

fell in Friday trades.

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