| Consensus | Consensus Range | Actual | Previous | |
| Index | 55.5 | 53.0 to 59.0 | 57.3 | 56.4 |
| Year-ahead Inflation Expectations | 3.5% | 4.0% |
Highlights
U.S. consumer sentiment improved slightly this month, with February's preliminary reading coming in at 57.3 (revised from xxx) vs. 56.4 in January and 52.9 in December. This is better than the consensus of 55.5 in the Econoday survey of forecasters. The uptick in confidence was primarily among households with large stock holdings.
While sentiment is currently the highest since August 2025, recent monthly increases have been smallwell under the margin of errorand the overall level of sentiment remains very low from a historical perspective, the report noted. Concerns about the erosion of personal finances from high prices and elevated risk of job loss continue to be widespread.
Preliminary year-ahead inflation expectations fell to 3.5 percent in February from 4.0 percent in January. This month's reading still exceeds those seen in 2024 and remains well above the 2.3-3.0% range seen in the two years pre-pandemic, the report said.
Long-run inflation expectations in February rose to 3.4 percent from 3.3 percent last month.
In comparison, readings ranged between 2.8% and 3.2% in 2024, and were below 2.8% throughout 2019 and 2020, the report said.
Market Consensus Before Announcement
Sentiment expected to fade to 55.5 as last month’s uptick to 56.4 appears overdone.
Definition
The University of Michigan's Consumer Survey Center questions households each month on their assessment of current conditions and expectations of future conditions. Preliminary estimates for a month are released at mid-month and are based on about 420 respondents. Final estimates are released near the end of the month and are based on about 600 respondents.
Description
The pattern in consumer attitudes and spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.
This balance was achieved through much of the nineties and, in large part because of this, investors in the stock and bond markets enjoyed huge gains. It was during the late nineties that the consumer sentiment index hit its historic peak, reaching levels that were never matched during the subsequent 2001 to 2007 expansion nor during the long expansion following the Great Recession.
Consumer spending accounts for more than two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy. Just note that changes in consumer confidence and retail sales don't move in tandem month by month.
