Consumer confidence in the U.S. dropped less than expected in the first month of 2011 as the economic recovery appears poised to quicken in the coming year, although the outlook for the labor market remains uncertain, according to Bloomberg. On Friday, the Thomson Reuters/University of Michigan final index of consumer sentiment dropped 0.3 points to reach 74.2 in January, which was better than the reading of 73.3 that economists had expected. The survey showed a 3.5 point drop in the current conditions sub-index to 81.8, although consumer expectations for the coming six months climbed more than two points to 69.3, marking the highest level in half a year.
The data confirms for Eric Green of TD Securities, “There’s a very solid foundation for very solid growth over the next couple of quarters,” although the Federal Reserve said that growth was not yet strong enough to reduce unemployment. Policymakers saw the need to keep $600 billion in planned stimulus measures. Speaking at the World Economic Forum in Davos, Switzerland, Treasury Department Secretary Timothy Geithner said the increase in confidence among consumers and economists was the U.S. economy’s switch to “a sustainable expansion,” although he added, “Its not an expansions that’s going to offer a rapid decline in unemployment.”
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Click here for coverage of Geithner’s comments from Bloomberg News.