Consumer Sentiment Falls Again
It looks as though Republicans lawmakers have agreed to a small increase in the debt ceiling that will forestall the next U.S. debt crisis by another two or three months. Unfortunately, that’s not likely to soothe the concerns of many Americans about their dysfunctional government (as noted here a short time ago) since the last time they forestalled the debt crisis, their mood didn’t improve.
As shown below, the Reuters/University of Michigan consumer sentiment index continued to decline after the “fiscal cliff” deal was made on New Year’s Day as the index dropped from 72.9 in December to 71.3 in the first of two readings for January. My guess is it won’t see an improvement anytime soon.
It’s possible that we’ve entered a new semi-permanent state of “kick the can down the road for a few months” in which we’ll have more budget and debt theatrics on a fairly regular basis for, perhaps, a very long time. Of course, none of this seems to be having an adverse effect on equity markets that, in recent months, seem to be rising on just about any kind of news.