U.S. consumer sentiment ebbs in February despite additional stimulus hopes
WASHINGTON (Reuters) - U.S.
WASHINGTON (Reuters) - U.S. consumer sentiment unexpectedly fell in early February amid growing pessimism about the economy among households with annual incomes below $75,000, even as the government is poised to deliver another round of COVID-19 relief money.
The University of Michigan said on Friday its consumer sentiment index slipped to 76.2 in the first half of this month from a final reading of 79 in January. Economists polled by Reuters had forecast the index little changed at 80.8.
"More surprising was the finding that consumers, despite the expected passage of a massive stimulus bill, viewed prospects for the national economy less favorably in early February than last month," the University of Michigan said in a statement.
President Joe Biden has proposed a $1.9 trillion recovery package, which is under consideration in the U.S. Congress. The government provided nearly $900 billion in additional pandemic relief in late December.
U.S. financial markets were little moved by the data.
The survey's measure of current economic conditions dipped to a reading of 86.2 this month from 86.7 in January. Its gauge of consumer expectations dropped to 69.8 from 74.0 in January, attributed entirely to households with incomes below $75,000.
"Households with incomes in the bottom third reported significant setbacks in their current finances, with fewer of these households mentioning recent income gains than anytime since 2014," the University of Michigan said.
"Among those with incomes in the bottom third, just 23% reported improved finances, the lowest since 2014. In contrast, among those with incomes in the top third, 54% reported their finances had improved."
Consumers also appeared to anticipate higher inflation in the near-term. The survey's one-year inflation expectations rose to 3.3% from 3.0%. But its five-year inflation outlook was unchanged at 2.7%.
Inflation expectations https://graphics.reuters.com/USA-STOCKS/dgkplzxqlpb/umichinflation.png
Consumer sentiment: inflation expectations DataStream Chart http://tmsnrt.rs/2fkaEBL
U.S. consumer sentiment and gasoline DataStream Chart http://tmsnrt.rs/2eRqSzN
U.S. Consumer Sentiment DataStream Chart http://tmsnrt.rs/2fk6Gce
Consumer sentiment and the PCE saving rate https://graphics.reuters.com/USA-STOCKS/nmopazjbwva/umich.png
(Reporting by Lucia Mutikani; Editing by Andrea Ricci)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.