Consumer Mood Improves More Than Expected
Consumer sentiment climbed higher than first reported in early January, reflecting broad gains, though confidence remains well below last year amid inflation pressures.
ANN ARBOR, Mich. — Revised data released by the University of Michigan on Friday showed consumer sentiment in the U.S. has improved much more than previously estimated in the month of January.
The University of Michigan said its consumer sentiment index for January was upwardly revised to 56.4 from a preliminary reading of 54.0. Economists had expected the index to be unrevised.
With the unexpected upward revision, the consumer sentiment index is well above the December reading of 52.9.
"While the overall improvement was small, it was broad based, seen across the income distribution, educational attainment, older and younger consumers, and Republicans and Democrats alike," said Surveys of Consumers Director Joanne Hsu.
She added, "However, national sentiment remains more than 20% below a year ago, as consumers continue to report pressures on their purchasing power stemming from high prices and the prospect of weakening labor markets."
The report said the current economic conditions index jumped to 55.4 in January from 50.4 in December, while the index of consumer expectations climbed to 57.0 in January from 54.6 in December.
With regard to inflation expectations, year-ahead inflation expectations fell to 4.0% in January from 4.2%.
Year-ahead inflation expectations dropped to their lowest reading since January 2025 but remain well above that month's 3.3%, Hsu noted.
Meanwhile, the report said long-run inflation expectations inched up to 3.3%in January from 3.2%in December.
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