The University of Michigan released revised data on Friday showing U.S. consumer sentiment improved by slightly more than previously estimated in the month of January.
The report said the consumer sentiment index for January was upwardly revised to 79.0 from the preliminary reading of 78.8. Economists had expected the reading to be unrevised.
With the upward revision, the consumer sentiment index is even further above December’s 69.7, reaching its highest level since hitting 81.2 in July 2021.
“For much of 2023, consumers had reserved judgment about the inflation slowdown and whether it would persist,” said Surveys of Consumers Director Joanne Hsu. “Over the last two months, consumers have finally felt assured that their worst fears for the economy would not come to pass.
“This is not to say, however, that consumers as a whole are feeling sanguine about the economy; nearly half still expect challenging times for the economy in the year ahead,” she added. “Uncertainty stemming from the conflict in the Middle East and the looming election may also factor into consumer views in the months ahead.”
The report also showed the current economic conditions index spiked to 81.9 in January from 73.3 in December, while the index of consumer expectations surged to 77.1 in January from 67.4 in December.
The University of Michigan also said year-ahead inflation expectations slipped to 2.9 percent in January after plunging to 3.1 percent in December, hitting the lowest level since December 2020.
Meanwhile, long-run inflation expectations were unchanged from the previous month at 2.9 percent, staying within the narrow the 2.9-3.1 percent range seen for 27 of the last 30 months.
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