Consumers’ sentiment toward the economy distinctly wavered in February for almost all groups across the board, with some disagreement across political parties, according to the latest data from the University of Michigan.
The latest Index of Consumer Sentiment reading came in at 64.7 for February, falling a sharp 9.8% from January’s 71.7 reading. The Index is also down a whopping 15.9% year-over-year.
All five index components saw decreases in February, which Surveys of Consumers Director Joanne Hsu stated was “led by a 19% plunge in buying conditions for durables, in large part due to fears that tariff-induced price increases are imminent.”
The report stated that while the decrease was unanimous across groups by age, income and wealth, results were varied in terms of political leanings.
“While sentiment fell for both Democrats and Independents, it was unchanged for Republicans, reflecting continued disagreements on the consequences of new economic policies,” said Hsu.
Hsu also noted that inflation expectations rose this month for Independents and Democrats, but fell slightly for Republicans.
Year-ahead inflation expectations jumped one percentage point from last month to 4.3% this month, the highest reading since November 2023—marking two consecutive months of “unusually large increases,” as stated by the report. The current reading is now well above the 2.3% – 3% range seen in the two years prior to the pandemic.Â
Long-run inflation expectations rose slightly from 3.2% in January to 3.5% in February, the largest month-over-month increase seen since May 2021. For both short- and long-run inflation expectations, this month’s increases were widespread and seen across income and age groups.
For the full report, click here.
