February 14, 2023
The University of Michigan released a report on Friday showing a modest improvement in U.S. consumer sentiment in the month of February.
The report showed the consumer sentiment index rose to 66.4 in February from 64.9 in January. Economists had expected the index to inch up to 65.0.
The consumer sentiment index increased for the third straight month, reaching its highest level since hitting 67.2 in January 2022.
The continued rebound by the headline index came as the current economic conditions index climbed to 72.6 in February from 68.4 in January.
At the same time, the index of consumer expectations edged down to 62.3 in February from 62.7 in the previous month.
“Recent developments in the economy, both positive and negative, have led to mixed attitudes among consumers with little net change in February,” said Surveys of Consumers Director Joanne Hsu.
“Overall, high prices continue to weigh on consumers despite the recent moderation in inflation,” she added. “Combined with concerns over rising unemployment on the horizon, consumers are poised to exercise greater caution with their spending in the months ahead.”
The report also said one-year inflation expectations climbed to 4.2 percent in February from 3.9 percent in January, with expectations rebounding after falling for three straight months.
Meanwhile, five-year inflation expectations remained at 2.9 percent for the third straight month and stayed within the narrow 2.9-3.1 percent range for 18 of the last 19 months.
“Uncertainty over short-run inflation expectations ticked up recently and continues to be notably elevated, indicating the potential for continued volatility in expected year-ahead inflation,” said Hsu.
She added, “In contrast, uncertainty over long-run inflation receded in recent months, though the uncertainty stands well above averages over the last 20 years.”
Source: RTT News
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