Thompson Reuters / University of Michigan Consumer Sentiment Index falls in January. The Thompson Reuters / University of Michigan Consumer Sentiment Index fell hard in January, despite economists’ expectations that it would rise  to 75.0.  After a final December reading of 72.9, the preliminary reading for January dropped to 71.3.  The index has not been this low since December of 2011.  Once the final report is released, we will learn whether the debt ceiling battle had an impact on the preliminary result.  There had been widespread expectations that the payroll tax increase would reduce consumer sentiment.   Cycles Change, Trends Change, Are You Keeping Up? The preliminary reading of the survey’s barometer of current economic conditions indicated a drop to 84.8 from 87.0, despite an expected 88.0.  The preliminary reading of the consumer expectations index also registered a decline, although it was a less-significant dip to 62.7 from 63.8.  Economists had been expecting the consumer expectations index to reach 65.2.  Thirty-five percent of the respondents expressed a negative reaction to the government’s handling of the fiscal cliff dispute.   The Greatest Investing Mistake You’ll Ever Make Also on Friday, the Department of Labor’s Bureau of Labor Statistics released its Regional and State Employment and Unemployment Summary for December .  Although Superstorm Sandy took a heavy toll on New York and New Jersey, those happened to be the two states with the highest increases in employment during December.  New York added 35,100 new non-farm payroll jobs and New Jersey added 31,200. From the report: Regional and state unemployment rates were generally little changed in December.  Twenty-two states recorded unemployment rate decreases, 16 states and the District of Columbia posted increases, and 12 states had no change, the U.S. Bureau of Labor Statistics reported today.  Forty-two states and the District of Columbia registered unemployment rate decreases from a year earlier, six states experienced increases, and two states had no change. The national jobless rate, 7.8 percent, was unchanged from November and was 0.7 percentage point lower than in December 2011. The major ETFs expected to respond to the Thompson Reuters / University of Michigan Consumer Sentiment Index and the December Regional and State Employment and Unemployment Summary are: SPDR S&P Retail ETF (NYSEARCA:XRT)  +0.51% Consumer Staples Select Sector SPDR ETF (NYSEARCA:XLP)  +0.36% Consumer Descretionary Select Sector SPDR Fund ETF (NYSEARCA:XLY)  +0.12% iShares Russell 2000 Index ETF (NYSEARCA:IWM)  +0.29%  Learn More About iShares ETFs Market Vectors Retail ETF (NYSEARCA:RTH)  +0.48% Bottom line: Consumer sentiment took a significant and unexpected fall in January, as many survey respondents complained about the government’s handling of the “fiscal cliff” dispute.  As a result, there are widespread expectations that the final report will highlight the payroll tax increase as a significant factor in deteriorating consumer sentiment Sign up for Wall Street Sector Selector’s FREE Stock Market Timing Indicator!    Disclaimer: The content included herein is for educational and informational purposes only, and readers agree to Wall Street Sector Selector’s Disclaimer , Terms of Service , and Privacy Policy before accessing or using this or any other publication by Wall Street Sector Selector or Ridgeline Media Group, LLC.