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U.S. Consumer Sentiment Unexpectedly Slumps In February As Inflation Expectations Surge
(RTTNews) - Consumer sentiment in the U.S. has unexpectedly deteriorated in the month of February, according to preliminary data released by the University of Michigan on Friday.
The University of Michigan said its consumer sentiment index slumped to 67.8 in February after rising to 71.1 in January. Economists had expected the index to inch up by to 72.0.
With the unexpected decrease, the consumer sentiment index dropped to its lowest level since hitting 66.4 in July 2024.
The deterioration by consumer sentiment came amid a surge by year-ahead inflation expectations, which spiked to 4.3 percent in February from 3.3 percent in January, reaching the highest level since November 2023.
Long-run inflation expectations also ticked up to 3.3 percent in February from 3.2 percent in January, remaining elevated relative to the 2.2-2.6 percent range seen in the two years pre-pandemic.
"Many consumers appear worried that high inflation will return within the next year," said Surveys of Consumers Director Joanne Hsu.
The report also said the current economic conditions index tumbled to 68.7 in February from 74.0 in January, while the index of consumer expectations fell to 67.3 in February from 69.3 in January.
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