Americans’ view of the economy improved slightly in February despite inflationary concerns, according to The University of Michigan’s monthly survey.
The Index of Consumer Sentiment rose to 56.6 in February, up from 56.4 in January, according to the data the University published on Friday, February 20. An initial February reading published earlier in the month had shown U.S consumer sentiment rose to 57.3.
The index has now risen for three consecutive months after sitting at 52.9 in December and 51.0 in November 2025. The Index, however, remains down year-over-year by 12.5 percent from 64.7 in February 2025.
Among other indexes, the University of Michigan’s Current Economic Conditions Index, which measures how consumers feel about the state of the U.S. economy and their place in it, was 56.6, improving 2.2 percent from 55.4 in January and down 13.9 percent against year-ago levels.
The Index of Consumer Expectations, which measures consumers’ projections for the next six months, was at 56.6, down 0.7 percent from 57.0 in January 2025 and off 11.6 percent from 64.0 a year ago.
Surveys of Consumers Director Joanne Hsu said, “Consumer sentiment stagnated this month with very little change, just 0.2 index points higher than January. All index components posted insignificant movements this month; overall, consumers do not perceive any material differences in the economy from last month. About 46 percent of consumers spontaneously mentioned high prices eroding their personal finances, with readings have exceeded 40 percent for seven months in a row. Sentiment is about 13 percent below a year ago and 21 percent below January 2025. That said, views vary considerably across the population. A sizable month-to-month increase in sentiment for the largest stockholders was fully offset by a decline among consumers without stock holdings. Similar divergences were seen across income and education, where higher-income or college educated consumers exhibited increases in sentiment while lower-income or less-educated counterparts did not. With their much stronger income prospects and investment porfolios, wealthier and higher-income consumers feel better insulated from any possible risks to the economy.
Hus continued, “Year-ahead inflation expectations fell from 4.0 percent last month to 3.4 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 held steady at 3.3 percent, just above the 2.8 percent and 3.2 percent range seen in 2024. In 2019 and 2020, long-run inflation expectations were consistently below 2.8 percent. Uncertainty, as measured by the middle 50 percent of expectations, is now its lowest since December 2024 for the short run and October 2024 for the long run.”
