Consumer sentiment rose 0.6 points in January to 79.6, which is 12.7 points higher than a year ago. The Current Economic Conditions Index decreased 0.4 points from the previous month to 81.5 but is 10.8 points above the February 2023 index. The Consumer Expectations Index increased 1.3 points to 78.4 from the last month and is 13.9 points higher than a year ago.
“Consumer sentiment was essentially unchanged from January, rising 0.6 index points this month and solidifying the large gains from the past two months. The fact that sentiment lost no ground this month suggests that consumers continue to feel more assured about the economy, confirming the considerable improvements in December and January across various aspects of the economy. Consumers continued to express confidence that the slowdown in inflation and strength in labor markets would continue. Five-year expectations for business conditions rose 5% to its highest reading since December 2020. Sentiment is currently about 30% above November 2023 and about 6% below its historical average since monthly data collection began in 1978.”
“Year-ahead inflation inched up from 2.9 in January to 3.0% in February. For the second consecutive month, short-run inflation expectations have fallen within the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations remained at 2.9% for the third straight month, staying within the narrow 2.9-3.1% range for 28 of the last 31 months. Long-run inflation expectations were elevated relative to the 2.2-2.6% range seen in the two years pre-pandemic,” said University of Michigan Surveys of Consumers Director Joanne Hsu.
Read the University of Michigan Surveys of Consumers release.
