University of Michigan's Index of Consumer Sentiment posted a preliminary January level of 78.8, the highest since July 2021 and up from 69.7 in December; consumer views supported by confidence in lower inflation and strengthening income expectations

January 21, 2024 (press release) –

Preliminary Results for January 2024

Interest Rate and Price Pressures on Consumers (September 8, 2023)
Revisions to Estimates (October 27, 2023)

Next data release: Friday, February 02, 2024 for Final January data at 10am ET
Surveys of Consumers Director Joanne Hsu
Consumer sentiment soared 13% in January to reach its highest level since July 2021, showing that the sharp increase in December was no fluke. Consumer views were supported by confidence that inflation has turned a corner and strengthening income expectations. Over the last two months, sentiment has climbed a cumulative 29%, the largest two-month increase since 1991 as a recession ended. For the second straight month, all five index components rose, with a 27% surge in the short-run outlook for business conditions and a 14% gain in current personal finances. Like December, there was a broad consensus of improved sentiment across age, income, education, and geography. Democrats and Republicans alike showed their most favorable readings since summer of 2021. Sentiment has now risen nearly 60% above the all-time low measured in June of 2022 and is likely to provide some positive momentum for the economy. Sentiment is now just 7% shy of the historical average since 1978.

Year-ahead inflation expectations softened to 2.9% after plunging in December. The current reading is the lowest since December 2020 and is now within the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations edged down to 2.8% falling just below the 2.9-3.1% range seen for 26 of the last 30 months. These expectations remained slightly elevated relative to the 2.2-2.6% range seen in the two years pre-pandemic.

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