The preliminary January University of Michigan confidence survey unexpectedly rebounded to 80.5 from 75.5 in December. Consensus estimates had looked for a decline to 74.5 in January. The December reading was the second lowest level for the confidence indicator in 15 years. The only lower reading was right after Hurricane Katrina when it dipped to 74.2. Otherwise, it hit a low of 63.9 in October 1990, during the last recession. For all of last year, the index averaged 86.1. Today's figure brings the index back to October's level.
Current conditions rose to 98.1 from 91 last month, and the outlook for the future rose to 69.1 from 65.6 in December.
Inflation expectations held steady for the next year at 3.4%, but eased for the longer term to 3% from 3.1%. Both inflation indexes remain at or near their highs for the past year.
NOTE - President Bush is scheduled to speak on the economy this morning at 11:50 AM.
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The index of leading economic indicators fell again in December, declining -.2% MoM (consensus -.1% MoM). This is the third straight monthly decline, and indicates further economic deterioration over the next 3-6 months.
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