❓WHAT HAPPENED: The University of Michigan’s preliminary January sentiment index showed a slight improvement, climbing to 54 from 52.9 in December, surpassing expectations of 53.5.
👤WHO WAS INVOLVED: University of Michigan researchers and consumers surveyed on economic conditions and inflation expectations.
📍WHEN & WHERE: The consumer sentiment index was released on January 9, 2026.
💬KEY QUOTE: “Although consumers’ worries about tariffs appear to be gradually receding, they remain guarded about the overall strength of business conditions and labor markets,’’ said Joanne Hsu, director of the survey.
🎯IMPACT: Consumer sentiment showed modest gains, but concerns about unemployment and inflation persist, with higher-educated and higher-income Americans expressing greater worry.
The University of Michigan’s preliminary January consumer sentiment index climbed to 54, up from 52.9 in December. This surpassed expectations of 53.5, signaling a modest rebound in consumer sentiment after record lows in 2025.
Meanwhile, the consumer expectations index reached a five-month high of 55, with improvements noted in both short- and long-term economic outlooks. The current conditions gauge also rose to a three-month high. Notably, consumers’ perception of their current financial situations improved, while expectations for the future declined.
Short-term inflation expectations remained flat, while longer-term expectations rebounded slightly. Democrats, who had previously expressed fears over tariffs, appear to be abandoning those concerns. Meanwhile, Republicans expect deflation, with a significant gap between the two groups’ outlooks on inflation.
Joanne Hsu, director of the survey, stated, “Although consumers’ worries about tariffs appear to be gradually receding, they remain guarded about the overall strength of business conditions and labor markets.’’ The survey also revealed that nearly two-thirds of consumers expect unemployment to rise in the coming year, with higher-educated and higher-income Americans showing greater concern about joblessness.
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