U.S. Consumer Sentiment Ticks Up
Consumer sentiment edged higher in January but remains well below last year, as inflation, prices and labor market concerns continue to weigh on confidence.
ANN ARBOR, Mich. – U.S. consumer sentiment edged higher for a second straight month in January, reaching its highest level since September 2025, though overall confidence remains significantly lower than a year ago, according to the University of Michigan’s latest Surveys of Consumers.
Improvements were driven largely by lower-income households, while sentiment declined among higher-income consumers. Even with modest gains over the past two months, overall sentiment is still nearly 25% below its January 2025 reading.
“While consumers perceived some modest improvement in the economy over the past two months, their sentiment remains well below year-ago levels,” said Joanne Hsu, director of the Surveys of Consumers. “They continue to be focused primarily on kitchen-table issues, like high prices and softening labor markets.”
Concerns about tariffs have begun to ease, but consumers remain cautious about the broader strength of business conditions and employment prospects, the survey found.
Inflation expectations for the year ahead held steady at 4.2% in January, the lowest level since January 2025 but still above the 3.3% reading from that period. Long-run inflation expectations ticked up to 3.4%, remaining elevated compared with recent historical norms.
Source: University of Michigan
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