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Consumer Sentiment: Steadily Edging Higher

February 24, 2023
Bottom Line:  Consumer sentiment edged modestly higher throughout February, according to the final reading of the University of Michigan's survey. Consumers' reports about the current conditions in the economy edged slightly lower, while their future expectations rose relative to earlier in the month. On net, the trends were still turning modestly higher after the 2022 lows at the peak of inflation worries, especially gasoline prices. Year-ahead inflation expectations were still higher than in January, but February's early reading was revised lower, down to 4.1% from 4.3%.  Overall, sentiment is now 17 index points above the all-time low from June 2022 but remains almost 20 points below its historical average. Wealthier consumers, especially those with stock market holdings, were feeling notably better, while lower-income consumers continue to feel the pain of high consumer prices.
The University of Michigan's Consumer Sentiment Index ROSE 2.1  to 67, ABOVE the 3-month average of 63.87 and 6.7% ABOVE the year-ago level.
The Current Conditions Index ROSE 2.3  to 70.7, ABOVE the 3-month average of 66.17 and 3.7% ABOVE the year-ago level.
The Future Expectations Index ROSE 2  to 64.7, ABOVE the 3-month average of 62.43 and 8.9% ABOVE the year-ago level.
Year-ahead inflation expectations ROSE 0.2  to 4.1, BELOW the 3-month average of 4.13 and -0.8 BELOW the year-ago level.
Long-term (5 years) inflation expectations were unchanged at 2.9, BELOW the 3-month average of 2.9 and -0.1 BELOW the year-ago level.
Article by Contingent Macro