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

The University of Michigan on Friday (2-24-23) released the final results of its Consumer Sentiment Index for February:

• The Index of Consumer Sentiment rose to a reading of 67.0 in February, up from 64.9 in January. This is a month-over-month increase of 3.2% and up 6.7% year-over-year (62.8 in February 2022).
• The Current Economic Conditions increased to a reading of 70.7 in February, up from 68.4 in January. This is a month-over-month improvement of 3.4% and up 3.7% year-over-year (68.2 in February 2022).
• The Index of Consumer Expectations declined to a reading of 64.7 in February, down from 62.7 in January. This is a month-over-month increase of 3.2% and up 8.9% year-over-year (59.4 in February 2022).

In remarks and analysis prepared to accompany the release of the final January Consumer Sentiment Index, Dr. Joanne Hsu, Director of Surveys for the University of Michigan, said:

“Consumer sentiment confirmed the preliminary February reading, rising a modest 3% above January. After lifting for the third consecutive month, sentiment is now 17 index points above the all-time low from June 2022 but remains almost 20 points below its historical average. Consumers with larger stock holdings exhibited particularly large increases in sentiment. Overall, February’s reading was supported by a 12% improvement in the short-run economic outlook, while all other index components were essentially unchanged.

Year-ahead inflation expectations rebounded to 4.1% this month, from 3.9% in January and 4.4% in December. Consumers continued to exhibit considerable uncertainty over short-run inflation, and thus their expectations may be unstable in the months to come. Long-run inflation expectations remained at 2.9% for the third straight month and stayed within the narrow 2.9-3.1% range for 18 of the last 19 months.”