University of Michigan Releases Preliminary Results of Its Consumer Sentiment Index for January

On Friday, the University of Michigan released the preliminary results of its Surveys of Consumers for January.

• The Index of Consumer Sentiment rose to a reading of 54.0 in January, up 2.1% from 52.9 in December. Year-over-year, the index was down 24.7% from 71.7 in January 2025.
• Current Economic Conditions increased to a reading of 52.4 in January, up 4.0% from 50.4 in December but down 30.2% from 75.1 a year earlier.
• The Index of Consumer Expectations edged higher to 55.0 in January, up 0.7% from 54.6 in December but down 20.9% from 69.5 in January 2025.

In remarks accompanying the release, Surveys of Consumers Director Joanne Hsu said:

“Consumer sentiment inched up for the second straight month and reached its highest reading since September 2025. Improvements in January were seen among lower-income consumers, while sentiment fell for those with higher incomes. All told, while consumers perceived some modest improvement in the economy over the past two months, their sentiment remains nearly 25% below last January’s reading. They continue to be focused primarily on kitchen table issues, like high prices and softening labor markets. Although consumers’ worries about tariffs appear to be gradually receding, they remain guarded about the overall strength of business conditions and labor markets. Note that more than 90% of interviews for this release were collected prior to the capture of Maduro in Venezuela.

Year-ahead inflation expectations held steady in January at 4.2%, the lowest reading since January 2025 but still above that month’s 3.3%. Long-run inflation expectations edged up to 3.4% from 3.2% in December. Readings ranged between 2.8–3.2% in 2024 and were below 2.8% throughout 2019 and 2020.”