Consumer sentiment was little changed this month, according to the University of Michigan Surveys of Consumers. .The index tracking consumer sentiment was at a six-month high, increasing 1.6 percent from January, to 57.3 from 56.4, but still 11.4 percent lower than 64.7 a year ago. “The overall level of sentiment remains very low from a historical perspective,” said Surveys of Consumers Director Joanne Hsu. “Concerns about the erosion of personal finances from high prices and elevated risk of job loss continue to be widespread.” Unemployment fell to 4.3 percent in January, according to the U.S. Labor Department. Employers added 130,000 jobs last month, and announced 108,435 layoffs. The index tracking current economic conditions increased 5.2 percent to 58.3 from 55.4 in January, but was 11.3 percent under its mark of 65.7 in February 2025. The index of consumer expectations fell 0.7 percent to 56.6 from 57.0 the previous month, and was down 11.6 percent from 64.0 12 months ago. Year-ahead inflation expectations fell to a 13-month low this month, dropping to 3.5 percent this month from 4.0 percent in January. This month’s reading is higher than in 2024 and is well higher than the 2.3 percent to 3.0 percent range in the two years before the pandemic. Long-term inflation expectations increased for the second straight month, to 3.4 percent from 3.3 percent in January. Readings were between 2.8 percent and 3.2 percent in 2024, and were under 2.8 percent in 2019-20. Inflation dropped to 2.4 percent in the 12 months ending in January, according to the Labor Department. Core CPI dropped to 2.5 percent annually, a nearly five-year low. “Sentiment surged for consumers with the largest stock portfolios, while it stagnated and remained at dismal levels for consumers without stock holdings,” Hsu said. “On net, modest increases in current personal finances and buying conditions for durables were offset by a small decline in long-run business conditions.” The Conference Board Consumer Confidence Index fell nearly 10 points in January to 84.5 from 94.2 in December. The index tracking consumer assessments of current business and labor market conditions fell nearly 10 points to 113.7 in January. The index measuring consumers’ short-term outlooks for income, business and labor market dropped 9.5 points to 65.1, 15 points under the threshold of 80 that typically signals a recession.“Confidence collapsed in January, as consumer concerns about both the present situation and expectations for the future deepened,” said The Conference Board Chief Economist Dana Peterson.
