- Millan Mulraine, deputy U.S. chief economist at TD Securities
US consumer sentiment rose in January to the highest level since October despite a stock market rout and increase in house prices in November, indicating underlying resilience in the world's number one economy despite a steep growth slowdown in recent months. The Conference Board's index of consumer confidence surged to 98.1 this month from a revised 96.3 in December, whereas economists had predicted a decline to 96.0. Furthermore, expectations index soared to 85.9 in January, up from 83 in the preceding month, though Americans' assessment of current economic conditions was unchanged from December. Consumers seemed to shrug off the recent precipitous plunge in the stock market and signs of economic weakness overseas. The confidence index reached a post-recession high of 102.6 in September. In addition, the report revealed that Americans' outlook for the labour market was also more optimistic. Those expecting more jobs in the coming months climbed 13.2% from 12.4%, while those anticipating fewer jobs fell slightly in January.
However, there are signs the weakness from manufacturing and export-focused industries is starting to filter into the services sector, with the latest data showing activity in that sector dropped to the lowest level in a year in January.
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