University of Michigan Consumer Sentiment Ends February -2.8% below January’s Reading

The University of Michigan today (2/26/21), released its final Consumer Sentiment survey results for February 2021. The Index of Consumer Sentiment is at a reading of 76.8. This is below January’s reading of 79.0 (-2.8%) and down from February 2020 reading of 101.0 (-24.0%). Survey of Consumers chief economist, Richard Curtin said about the results, despite a small gain in late February, consumer sentiment was slightly lower for the entire month than in January. All of February’s loss was due to households with incomes below $75,000, with the declines mainly concentrated in future economic prospects. The worst of the pandemic may be nearing its end, but few consumers anticipate the type of persistent and robust economic growth that restores employment conditions to the very positive pre-pandemic levels. The recent revival in spending has been driven by drawdowns in precautionary savings. Interestingly, those with a college degree were more cautious about prospects for the national economy until just a few months ago. Perhaps the most attention has been garnered by rising inflationary expectations. The year ahead inflation rate was expected to be 3.3% in February, up from 3.0% last month and 2.5% in December.