US Consumer Sentiment Revised Slightly Lower

The University of Michigan Consumer Sentiment Index was revised down to 56.6 in February 2026 from a preliminary 57.3, little changed from January’s 56.4. Still, it marked the highest reading since August 2025, following historically weak levels in recent months. All major components showed minimal movement, suggesting consumers see little change in economic conditions from the prior month. About 46% of respondents cited high prices as a strain on personal finances, with that share remaining above 40% for seven consecutive months. Perceptions varied notably across groups: sentiment improved among large stockholders but declined among households without equities. Similarly, higher-income and college-educated consumers reported gains, while lower-income and less-educated respondents did not. On inflation, one-year expectations dropped sharply to 3.4% from 4.0%, the lowest since January 2025, while longer-term expectations were unchanged at 3.3%.

The University of Michigan’s consumer sentiment index rose by 0.9 points to 57.3 in February 2026, marking a third consecutive monthly increase and beating market expectations of 55, according to preliminary data. Despite the improvement, sentiment remained roughly 20% below its level in January 2025. The gains were driven largely by consumers with significant stock holdings, while sentiment among households without equity exposure stagnated at depressed levels. Modest improvements in perceptions of current personal finances and buying conditions for durable goods were partly offset by a slight deterioration in long-term business expectations. Concerns over the erosion of household finances due to high prices and the risk of job losses remain widespread. On the price front, year-ahead inflation expectations fell sharply to 3.5% from 4.0% in January, the lowest level since January 2025, while longer-term inflation expectations edged up for a second month to 3.4% from 3.3%.

The University of Michigan’s consumer sentiment index was revised up to 56.4 in January 2026, from a preliminary 54.0 and December’s 52.9. This marks a second straight monthly increase and the highest reading since August, with modest gains recorded across all major components of the index. Although the improvement was incremental, it was notably broad based, spanning income levels, educational attainment, age groups, and political affiliations. That said, overall sentiment remains more than 20% below its level a year ago. Consumers continue to cite strains on purchasing power from elevated prices, alongside growing concerns about a potential softening in labor market conditions. Beyond tariff policy, foreign developments appear to have little influence on consumers’ economic perceptions. Year-ahead inflation expectations declined to 4.0%, the lowest level since January 2025, while longer-run inflation expectations edged up slightly to 3.3% from 3.2% in December.