'Inauguration bump' gooses consumer confidence

Consumer confidence improved slightly over the last month, but is still near its lowest levels in decades, according to the Reuters/University of Michigan Index of Consumer Sentiment report, released this morning. The uptick was mild, with consumer sentiment levels hitting a rating of 62.1 this month, up from 60.1 in December. The increase was most likely influenced by the optimism that accompanied the inauguration of President Obama earlier this month, rather than an indication that the economy is actually improving, said observers. "We have a new president who based his entire campaign on hope and change," said Madeline Schnapp, director of macroeconomic research at TrimTabs Investment Research in Sausalito, Calif. "This is an inauguration bump — the economic conditions are still what they were a month ago." And the economic situation has actually deteriorated in the last month, Ms. Schnapp pointed out. Many consumers canvassed for the poll indicated in today's report that they have lost their jobs, worked fewer hours or generated lower incomes. At the same time, they also reported a continued decline in home values and major losses in savings and retirement accounts. "Nearly all consumers anticipate the deepest and longest recession in the post-World War II era," Richard Curtin, direction of the Reuters/University of Michigan surveys of consumers, said in a statement. The University of Michigan is located in Ann Arbor. Reuters is a subsidiary of Thomson Reuters Corp. of Toronto.