Inflation and employment concerns lower consumer sentiment, impacting outlook for future economic conditions

From Investing.com: 2025-01-27 03:32:00

The University of Michigan sentiment data for January was revised lower to 71.1, marking the first monthly decline in sentiment after five months of gains. Concerns about future employment are rising, with respondents expecting a rise in 2025. Weekly initial jobless claims remain low, hovering between 200K and 250K for the past four years. Short-term inflation rose to 3.3%, hitting an 8-month high, while long-term inflation expectations increased to 3.2% in January. Respondents cited policy changes on tariffs as the reason behind their expectations.

The major market average hit new highs, matching the size of the 2020-2022 bull market in points. Interest rates have seen some relief as the 10-year Treasury yield remains below last year’s high. The Nasdaq has broken below the last major swing low and is expected to pull back. International stock funds are outperforming the S&P 500, with VXUS up 4.2% compared to SPY’s 3.72% increase.



Read more at Investing.com: Inflation Risks, Employment Concerns Continue to Weigh on Consumer Sentiment