The U.S. Consumer Sentiment Index improved by 2.1 percent in January compared to the previous month, coming in above analysts’ expectations, according to a preliminary report released by the University of Michigan. However, the figure plunged by 24.7 percent on an annual basis.
The Index reached 54 while economists had expected 53.5.
The Current Economic Conditions Index jumped by 4 percent month-over-month to stand at 52.4 in January, dropping by 30.2 percent year-on-year. Meanwhile, the Index of Consumer Expectations increased by 0.7 percent from December and plummeted by 20.9 percent from January 2025, landing at 55.
In December 2025, the University of Michigan’s Consumer Sentiment Index rose slightly to 52.9, up from November’s 51.0, marking its first increase in five months.
Surveys of Consumers Director Joanne Hsu said in the January report, “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 percent 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 percent of interviews for this release were collected prior to the capture of Maduro in Venezuela.”
