The nation's spirits have yet to revive from last fall's recessionary levels, according to the closely watched University of Michigan Survey of Consumer Sentiment.
"Sentiment has remained largely unchanged" from December, its report to subscribers said. The sentiment index edged down from 68.2 in December to 67.1 in January, but a decline of a point or so is not statistically significant.
The report was disappointing, not only to investors but to Federal Reserve officials who were looking for some sign that the Fed's latest move to ease credit was having an impact on Main Street. On Tuesday, a rumor that the survey would show a sharp rise in confidence helped the stock market to a hefty rally.
"There's no great watershed reaction to the Fed's discount rate reduction," said Robert Brusca, chief economist at Nikko Securities. "Stock market euphoria hasn't swept consumers."
But a member of the Federal Reserve Board said yesterday he didn't think additional reductions in interest rates would do much to boost consumer confidence or reinvigorate the national economy, the Associated Press reported. Board member John P. LaWare said he believed the central bank already had manipulated the economy as much as it could by lowering the discount rate to its current level of 3.5 percent, the lowest level in nearly a quarter-century.
The discount rate -- the interest the Fed charges to member banks -- plays an enormous role in the levels of other interest rates.
This initial look at the way consumers feel about the economy and their own finances in January is based on a telephone survey of about 300 families around the country in the first half of the month. The survey is included in the Department of Commerce's monthly index of leading indicators.