WASHINGTON (MNI) – The final reading of U.S. consumer sentiment in
January came in better than expected and is at its highest level since
February last year, according to the Reuters/University of Michigan
Consumer Sentiment survey released Friday.

The final January consumer sentiment index was 75.0, above median
expectations of 74.0 in a Market News International survey of
economists, and compared to 74.0 reported earlier in the month. The
consumer sentiment index was 69.9 in December and 64.1 in November.

The index’s measure of how consumers view current conditions came
in at 84.2 — also the highest since February — and an increase from
the initial reading of 82.6. The index was 79.6 in December’s report,
and 77.6 in November.

The final gauge of consumers’ expectations of future conditions
rose to 69.1, up 0.7 points from the preliminary report, and also the
highest level since May 2011. This after the index came in at 63.6 in
December and 55.4 in November.

According to the report, consumers’ 12-month economic outlook rose
to 82.0 vs. 79.0 in December.

Consumers’ final 1-year inflation expectations for January rose to
3.3% from 3.2% initially reported. The expectation was for 3.1% in
December. Final five-year inflation expectations are at 2.7%, down from
2.8% in the preliminary report. December’s expectation was also for
2.7%.

In a statement following its January meeting Wednesday, the Federal
Reserve’s policymaking Federal Open Market Committee said it expects
economic growth over coming quarters to be modest and that the
unemployment rate will decline only gradually toward levels consistent
with its dual mandate.

As a result, the FOMC said economic conditions “are likely to
warrant exceptionally low levels for the federal funds rate at least
through late 2014.”

In his quarterly news conference following the FOMC meeting, Fed
Chairman Ben Bernanke noted that while there has been some encouraging
news regarding the economy recently, the country is not out of the woods
yet.

“We are obviously hoping the strength we saw in the fourth quarter
and in recent data will continue into 2012,” Bernanke told reporters,
however, “I don’t think we’re ready to declare that we’ve entered a new
stronger phase at this point.”

** Market News International Washington Bureau: 202-371-2121 **

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