University of Michigan Reports Final Results of Its Consumer Sentiment Index for February

Posted on March 3, 2024

On Friday, the University of Michigan released the final results of its Surveys of Consumers for February.

  • The Index of Consumer Sentiment decreased to a reading of 76.9 in February, down from 79.0 in January. This is a month-over-month decline of 2.7% but up 14.9% year-over-year (66.9 in February 2023).
  • Current Economic Conditions fell to a reading of 79.4 in February, down from 81.9 in January. This is a month-over-month decline of 3.1% but up 12.3% year-over-year (70.7 in February 2023).
  • The Index of Consumer Expectations declined to a reading of 75.2 in February, down from January’s reading of 77.1. This is a month-over-month decline of 2.5% and up 16.6% year-over-year (64.5 in February 2023).

In remarks and analysis prepared to accompany the report, Surveys of Consumers Director Joanne Hsu said:

“Consumer sentiment moved sideways this month, slipping just two index points below January and holding the gains in sentiment seen over the past three months. Expected business conditions remained substantially higher than last autumn, with short-run expectations now 63% above and long-run expectations 46% above November 2023 readings. For all but one index component, readings this month were higher than all values between mid-2021 and the end of 2023. Consumers perceived few changes in the state of the economy since the start of the new year, and they appear to be assured that inflation will continue on a favorable trajectory. Sentiment is currently 8 points shy of the historical average since 1978.

Year-ahead inflation inched up from 2.9 in January to 3.0% in February. For the second straight month, short-run inflation expectations have fallen within the 2.3–3.0% range seen in 2018 and 2019. Long-run inflation expectations remained at 2.9% for the third straight month, staying within the narrow 2.9–3.1% range for 28 of the last 31 months. Long-run inflation expectations were modestly elevated relative to the 2.2–2.6% range seen in the two years pre-pandemic.”

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