U.S. Consumer Sentiment Improves Slightly More Than Expected In January

(RTTNews) - A report released by the University of Michigan on Friday showed consumer sentiment in the U.S. has improved by slightly more than expected in the month of January.

The University of Michigan said its consumer sentiment index rose to 54.0 in January after climbing to 52.9 in December. Economists had expected the index to inch up to 53.5.

With the bigger than expected increase, the consumer sentiment index reached its highest level since hitting 55.1 in September.

"Improvements in January were seen among lower-income consumers, while sentiment fell for those with higher incomes," said Surveys of Consumers Director Joanne Hsu.

"All told, while consumers perceived some modest improvement in the economy over the past two months, their sentiment remains nearly 25% below last January's reading," she added. "They continue to be focused primarily on kitchen table issues, like high prices and softening labor markets."

The report said the current economic conditions index climbed to 52.4 in January from 50.4 in December, while the index of consumer expectations crept up to 55.0 in January from 54.6 in December.

On the inflation front, the University of Michigan said year-ahead inflation expectations held steady at 4.2 percent in January.

Hsu noted the year-ahead inflation reading remains at its lowest level since January 2025 but is still well above that month's 3.3 percent.

Meanwhile, the report said long-run inflation expectations rose to 3.4 percent in January from 3.2 percent in December.

"In comparison, readings ranged between 2.8 and 3.2% in 2024, and were below 2.8% throughout 2019 and 2020," said Hsu.