US consumer confidence fell slightly in January and they were less optimistic about short-term business and labor market conditions.
The Conference Council yesterday revealed that its consumer confidence index had fallen to a reading of 113.8 points this month, from December’s slightly downward revised 115.2. Economists polled by Reuters predicted the index would drop to 111.8.
“The current situation index has improved, indicating that the economy has entered the new year on a solid footing,” said Lynn Franco, senior director of economic indicators at The Conference Board in Washington.
“However, expectations of short-term growth prospects have weakened, indicating a likely slowdown in growth during the first quarter of 2022,” it added.
The decrease in confidence probably reflects the increase in Covid-19 infections.
The United States records an average of 696,541 new coronavirus infections per day, according to a Reuters analysis of official data. The winter wave of infections, driven by the Omicron variant, appears to be declining in some regions, including New York, which has been hit the hardest.
slowdown in US and China
In other data released on Tuesday, the International Monetary Fund (IMF) lowered its expansion forecasts for the United States, China and the world economy, citing risks posed by the coronavirus pandemic, inflation, supply disruptions and tighter policies.
According to the IMF, the United States will grow by 4% this year, representing a decrease of 1.2 percentage points compared to the previous expectation, while it forecasts for China a growth of 4.8%, which represents a decrease of 0, 8 percentage points reflects compared to the IMF. last calculation.
“We forecast global growth this year at 4.4%, 0.5 percentage points lower than previously estimated, largely due to predicted cuts in the United States and China,” said Gita Gopinath, a senior IMF official. wrote a blog to accompany the World Economic Outlook. report.
Waiting for monetary policy news
In this context, the Monetary Policy Committee of the US Federal Reserve began its meeting yesterday and the talks will end today at 12:00.
The central bank will specify the measures to combat stronger and more persistent inflation than expected.
Some observers say he may announce a first rate hike in March, when the next meeting will take place.
An increase in tariffs should make it possible to mitigate demand by making credit more expensive, to release pressure on prices.
The market also expects news about the extent of the increase in the rate, which is currently virtually zero. Traders are also waiting to see how many increases there could be this year.
Prices in the United States increased by 7% in 2021, their highest annual increase since 1982.
Reference-www.eleconomista.com.mx