January 18, 2019 / 3:46 PM / 9 months ago

UPDATE 1-U.S. consumer sentiment swoons to lowest since Trump's election

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Jan 18 (Reuters) - U.S. consumer sentiment deteriorated in early January to its weakest level since Donald Trump’s U.S. presidential victory in 2016, a widely followed private survey showed on Friday, citing the federal government shutdown and worries about the economy.

The University of Michigan’s preliminary reading on consumer sentiment for January fell to 90.7 from a final December reading of 98.3. It was the lowest figure since October 2016 and the steepest drop since September 2015.

Analysts polled by Reuters had forecast of 97.0.

“The loss was due to a host of issues including the partial government shutdown, the impact of tariffs, instabilities in financial markets, the global slowdown, and the lack of clarity about monetary policies,” Richard Curtin, the chief economist of University of Michigan’s surveys of consumers, said in a statement.

The survey’s gauge on consumers’ view on current economic conditions decreased to 110.0, the lowest since August. This was below a reading of 116.1 in late December and analysts’ median forecast of 114.5.

The barometer on consumer expectations tumbled to 78.3, the lowest since October 2016, from 87.0 in late December. Analysts had projected a reading of 86.0.

“Aside from the direct economic impact from these various issues on the economy, the indirect effect meant that half of all consumers believed that these events would have a negative impact on Trump’s ability to focus on economic growth,” Curtin said.

Despite growing worries, consumers were in good financial shape to support their spending in 2019, Curtin said. (Reporting By Richard Leong; Editing by David Gregorio)

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