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Consumer Sentiment:  Expecting Rate Hikes, Consumers "Borrow In Advance"

January 27, 2017
Bottom Line: Consumer sentiment was revised upward in late January and is slightly above December's final level of 98.2%. The survey noted that consumers said they are expecting rate hikes and 1 in 5 suggested they were borrowing in advance of higher expected mortgage rates -- that is the highest level in 20 years. On net consumers are much more positive and are holding that view two months after the election but the underlying data suggests potential for tremendous volatility going forward.

Consumer Sentiment was REVISED UP by 0.4 points in late January to 98.5%, compared with market expectations for no change to 98.1%. Sentiment has improved by 11.3 points over the past 3 months. With this month's slight increase, compared to December's final level of 98.2%, sentiment is 7.1% ABOVE its year ago level.

Current Conditions were REVISED DOWN by 1.2 points to 111.3%. Current conditions are now 4.6% ABOVE their year ago level.

Consumer Expectations were REVISED UP by 1.4 points to 90.3%. With this month's slight increase, compared to December's final level of 89.5%, expectations are 9.2% ABOVE their year ago level.