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Consumer Sentiment: Rebound Holds Firm

January 27, 2023
Bottom Line:  The final reading of consumer sentiment from the University of Michigan's survey confirmed the sharp increase to nine-month highs that was reported earlier this month. Consumers' expectations for inflation continued to decline, dropping another tenth in the last few weeks bringing January's year-ahead expectations down to 3.9%, the lowest since April of 2021. Overall, sentiment has been improving but remains historically low. Consumers still face historic uncertainty, but they are slowly becoming less pessimistic as inflation eases and labor markets remain solid.
Consumer Sentiment
was REVISED UP by 0.3 points in late January to 64.9, compared with market expectations for no change to 64.6.
Sentiment has improved by 5.0 points over the past 3 months. With this month's moderate increase, compared to December's final level of 59.7, sentiment is 3.4% BELOW its year-ago level.
Current Conditions
were REVISED DOWN by 0.2 points to 68.40. Current conditions are now 5.0% BELOW their year-ago level.
Consumer Expectations were REVISED UP by 0.7 points to 62.7.   With this month's modest increase, compared to December's final level of 59.9, expectations are 2.2% BELOW their year-ago level.
Article by Contingent Macro