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January
19
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Week In Review

Consumer Sentiment

The University of Michigan Consumer Sentiment Index fell in January from 95.9 to 94.4. Expectations were for an increase to 97.

Our Take

The drop in sentiment is a little surprising given the uptick in recent economic reports, a strong stock market, and the tax cut. Survey results show consumers to be most worried about household income, despite recent modest wage gains. However, even with the January downtick, consumer sentiment remains positive.


Municipals

S&P Global Ratings revised its outlook on Houston’s bond rating, increasing it from AA negative to AA stable. S&P cited pension reform, along with the city’s “very strong management, with strong financial policies” as reasons for the outlook change. Moody’s boosted its outlook on Houston last November.

Our Take

Houston took steps late last year to implement pension reform. Retiree benefits were cut and plans were made to deal with increasing pension costs. Houston is making progress on tackling their pension liabilities. Other large U.S. cities struggling with pension liabilities, such as Chicago, should follow Houston’s lead.