US consumer confidence rose slightly in January but remained at comparatively depressed levels, with expectations of a deep and long recession persisting, a survey showed today.
The Reuters/University of Michigan Surveys of Consumers said its preliminary index reading of confidence for January rose to 61.9 from December's 60.1.
The index was above economists' expectations of 59.0, according to the median of forecasts in a Reuters poll. The early January reading was the highest since 70.3 in September.
However, "consumer confidence continued to hover near its half-century low, showing no signs of significant change during the past six months," the report said.
"Consumers cited even more negative income prospects as well as anticipated further declines in the value of their homes and pension accounts," according to the report.
One-year inflation expectations rose in January to 2.0 per cent from 1.7 per cent in December. Despite the slight rise, the January one-year inflation expectation remained "well below any other reading in the past quarter century except for immediately following (September 11th, 2001)," the report said.
The uptick in the inflation outlook was due to expectations of rising gasoline prices in the coming year, the report said.
Longer-term inflation expectations also rose, with an annual inflation rate of 3 per cent expected over the next five years, up from 2.6 per cent last month.
The index of current conditions eased slightly to 69.2 in January from 69.5 in December, while the index of consumer expectations rose to 57.2 from 54.0.
Consumers were reluctant to spend even though they saw deals in the marketplace, the report said.
"Consumers were hesitant to make large purchases due to their heightened uncertainty about their future job and income prospects even though most consumers think that current prices are quite attractive."
Economic expectations could improve in coming months after President-elect Barack Obama takes office, according to the report.
"If Obama's economic policies receive widespread public support and are promptly enacted -- as is now anticipated -- consumer confidence could post some anticipatory increases even as actual economic conditions continue to worsen," the report said.
