FX.co ★ US Consumer Sentiment Ticks Higher in January

The University of Michigan's consumer sentiment index saw a revision upward to 56.4 in January 2026, improving from an initial 54.0 and surpassing December's 52.9. This marks the second consecutive monthly rise and registers as the highest figure since August, with moderate improvements noted across all significant components of the index. While the overall increase was gradual, it was widespread, reflecting advances among various income brackets, education levels, age demographics, and political groups. Nevertheless, the overall sentiment still lags more than 20% behind its level from a year prior. Consumers continue to report pressures on purchasing power due to elevated prices, coupled with increasingly apprehensive views regarding potential softening in labor market conditions. Concerning influences on consumers’ economic perceptions, apart from tariff policies, foreign developments seem to exert minimal impact. Meanwhile, expectations for inflation over the next year have declined to 4.0%, the lowest since January 2025, while long-term inflation expectations saw a slight increase to 3.3% from December's 3.2%.