US consumer confidence dips in January, political partisanship at record levels

US consumer confidence dipped at the start of the year, as economists continued to try and make sense of the surge seen after the latest presidential elections.

The University of Michigan´s consumer confidence index dipped from a reading of 98.2 at the end of December 2016 to 98.1 at the start of January.

Weakness was concentrated in the subindex tracking consumers´ expectations, which slipped from 89.5 to 88.9, while that referencing current conditions rose from 111.9 to 112.5 - the highest mark since 2004.

Richard Curtin, the survey´s chief economist, highlighted how the partisan divide among consumers was running at historical peaks and colouring their view of the economic outlook.

"From 1960 to 2000, the combined average of positive and negative references to government policies was just 6%; during the past six years, this proportion averaged 20%, and rose to new peaks in early January, with positive and negative references totaling 44%. This extraordinary level of partisanship has had a dramatic impact on economic expectations," Curtin said in a statement.

In January, the partisan divide stood at 42.7 points, he said. Confidence among those mentioning government policies in a favourable light was at 108.9 but at just 66.2 for those making unfavourable references.

"Needless to say, these extreme differences would imply either strong growth or a recession. Since neither is likely, one would anticipate that both extreme views will be tempered in the months ahead," Curtin added.

On a more positive note, among those making neither positive or negative references confidence was at 90.9, which was compatible with real consumption growth running at 2.7%.