The University of Michigan has released a report showing a slight rise in consumer sentiment in February, following a significant increase in the previous month. The consumer sentiment index reached 79.6 in February, slightly higher than January's 79.0, despite economists' expectation of an 80.0 index.
This increase marked the index's highest level since its peak at 81.2 in July 2021. Joanne Hsu, the Director of Surveys of Consumers, suggests that this stable consumer sentiment indicates a continued confidence in the economy. She highlighted the sustained optimism towards the ongoing slowdown in inflation and persistent strength in job markets.
The headline index's modest climb reflects a rise in consumer expectations, with this specific index growing to 78.4 in February from January's 77.1. However, the University's current economic conditions index noted a slight decrease in February, down to 81.5 from January's 81.9.
In terms of inflation, the report indicates that year-ahead inflation had a small increase, from 2.9% in January to 3.0% in February. Long-term inflation expectations remained consistent at 2.9% for the third consecutive month, remaining within the narrow 2.9-3.1% range for 28 of the past 31 months.
