U.S. consumer sentiment rose to a six-month high in January, although concern for job insecurity and inflation remained widespread, according to the University of Michigan’s monthly survey.

The third consecutive monthly improvement in consumer sentiment, according to the data, was primarily driven by consumers with the largest stock portfolios, confirming a “K-shaped economy” in which higher-income households are doing well while lower-income consumers are struggling.

The University of Michigan’s Index performance found:

  • Index of Consumer Sentiment was up 1.6 percent to 57.3 from 56.4 in January 2026 but down 11.4 percent from 64.7 in the same month a year ago.
  • Current Economic Conditions grew 5.2 percent to 58.3 from 55.4 in the prior month, down 11.3 percent from 65.7 a year ago.
  • Index of Consumer Expectations dipped 0.7 percent to 56.6 from 57.0 in January and off 11.6 percent from 64.0 in February 2025.

Joanne Hsu, director of Surveys of Consumers, at the University of Michigan, stated, “Consumer sentiment was essentially unchanged, inching up less than one index point from last month and sitting about 20 percent below January 2025. Sentiment surged for consumers with the largest stock portfolios, while it stagnated and remained at dismal levels for consumers without stock holdings. On net, modest increases in current personal finances and buying conditions for durables were offset by a small decline in long-run business conditions. While sentiment is currently the highest since August 2025, recent monthly increases have been small—well under the margin of error—and the overall level of sentiment remains very low from a historical perspective. Concerns about the erosion of personal finances from high prices and the elevated risk of job loss continue to be widespread. Interviews for this release cover the two-week period that ended this past Monday.

“Year-ahead inflation expectations fell from 4.0 percent last month to 3.5 percent this month, the lowest reading since January 2025. This month’s reading still exceeds those seen in 2024 and remains well above the 2.3-3.0 percent range seen in the two years pre-pandemic. Long-run inflation expectations inched up for the second straight month, from 3.3 percent last month to 3.4 percent this month. In comparison, readings ranged between 2.8 percent and 3.2 percent in 2024 and were below 2.8 percent throughout 2019 and 2020.

“U.S. consumer sentiment improved across the board in January against the prior month but remained well below year-ago levels as concerns about high prices and the labor market lingered, according to the University of Michigan’s monthly survey.”

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