U.S. consumer sentiment increased to a six-month high in February, though anxiety over jobs and inflation remained widespread, according to the University of Michigan’s monthly survey.
The third straight monthly improvement in sentiment reported was mostly driven by consumers with the largest stock portfolio holdings, confirming a so-called K-shaped economy, where higher-income households are doing well but lower-income consumers are struggling.
The index performance includes:
Surveys of Consumers Director Joanne Hsu said, “Consumer sentiment was essentially unchanged, inching up less than one index point from last month and sitting about 20 percent below January 2025. Sentiment surged for consumers with the largest stock portfolios, while it stagnated and remained at dismal levels for consumers without stock holdings. On net, modest increases in current personal finances and buying conditions for durables were offset by a small decline in long-run business conditions. While sentiment is currently the highest since August 2025, recent monthly increases have been small — well under the margin of error — and the overall level of sentiment remains very low from a historical perspective. Concerns about the erosion of personal finances from high prices and elevated risk of job loss continue to be widespread. Interviews for this release cover the two-week period that ended this past Monday.
“Year-ahead inflation expectations fell from 4.0 percent last month to 3.5 percent this month, the lowest reading since January 2025. This month’s reading still exceeds those seen in 2024 and remains well above the 2.3-3.0 percent range seen in the two years pre-pandemic. Long-run inflation expectations inched up for the second straight month, from 3.3 percent last month to 3.4 percent this month. In comparison, readings ranged between 2.8 percent and 3.2 percent in 2024, and were below 2.8 percent throughout 2019 and 2020.
“U.S. consumer sentiment improved across the board in January against the prior month but remained well below year-ago levels as concerns about high prices and the labor market lingered, according to the University of Michigan’s monthly survey.”
