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Rising gasoline prices sour U.S. consumer mood

posted Jan 15, 2011 08:00:28 by sheebe

NEW YORK | Fri Jan 14, 2011 9:55am EST
Jan 14 (Reuters) - Rising gasoline prices beat down U.S. consumer sentiment in early January, overshadowing an improved job outlook and passage of temporary federal tax breaks, a survey released on Friday showed.

A year-end surge in gasoline prices ratcheted up consumer inflation expectations to their highest in more than two years, according to the latest data from Thomson Reuters and the University of Michigan.

The surveys' preliminary January reading on the overall consumer sentiment slipped to 72.7, below 74.5 in December. It fell short of a 75.4 reading predicted by economists polled recently by Reuters.

Consumers' current mood deteriorated with average gasoline prices stuck above $3 a gallon. The surveys' barometer of current economic conditions was 79.8 in early January, down from 85.3 in December and below a forecast of 84.6.

The surveys' one-year inflation expectation rose to 3.3 percent from 3.0 percent in December, which was the highest since October 2008. But the five-to-10-year inflation outlook held steady at 2.8 percent for a fourth straight month.

On the other hand, the negative effect from consumers spending more at gasoline stations did not reduce their optimism on the economy.

The survey's gauge of consumer expectations rose to 68.2 from 67.5 in December. It was roughly in line with a predicted reading of 68.3.

Moreover, the 12-month economic outlook index jumped to 87, which was the highest since September 2009.

In early January, just 21 percent of consumers surveyed expected the unemployment rate to increase in the year ahead, the lowest figure recorded in 10 years.

"The stronger performance of the economy was expected to be reflected in the near term by more favorable expected changes in employment," Richard Curtin, director of surveys of consumers from Thomson Reuters and University of Michigan, said in a statement.

(Reporting by Richard Leong; Editing by Padraic Cassidy)
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2 replies
sheebe said Jan 15, 2011 08:08:08
This is what worries me because I am a Courier and it is 100.00 a week to do my job and I get paid every two weeks. It will hurt in the bills, food, so is it worth working? I can’t wait to get back to work but I was hurt pretty bad and the Dr. told me today that another 6 weeks so I will only get my measly Worker’s Compensation check which is pathetic but better than nothing. We could drill our own oil and never have to take oil from a bunch of Arab Muslims. Oh I said Muslim! We need to figure a way to rid the EPA they need to go out of business, I am so sick of them and their regulations have been worse than it was before they started butting in. I am grumpy about the gas prices as well and it is going to get higher and higher like everything that we need for life.
Dilligaff said Jan 16, 2011 03:40:53
Hi Sheebe,
I don't think the general public is aware of how much intrusion the EPA has in all facets of their lives. They are another cause of our jobs and technology going overseas. As far as the price of gas, well it is a shock, but it is going to become worse. Those that think green vehicles will aleviet this are in for a surprise when they realize that fossile fules will have to be used to create the electricty to charge their vehicles. This just puts a bigger drain on the electric grid. No I'm not going to get in to alternative energy, googel them and look up their cost with out huge government subsidies. Subsidies, are YOUR taxes, and then you will be taxed to use these green sources.
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