Consumer sentiment unexpectedly rose for the third consecutive month in early February, according to the University of Michigan’s preliminary assessment of the household sector.
The index of consumer sentiment rose to 57.3, upending expectations that the index would retreat after the prior months’ unexpected rise. The improvement was driven by better views of current economic conditions, with the index climbing 5.2 percent to 58.3. The gauge of expected conditions slipped slightly from 57.0 to 56.6.
This is the highest reading for the University of Michigan’s index since August of 2025. The index has climbed 12.5 percent since the recent low in November. It is down 11.5 percent from a year ago.
Both Republicans and Democrats registered improved readings in February, with rises in both the expectations and current conditions barometers. Republican expectations are now at the highest reading since shortly after Trump’s return to the White House. Independents were more satisfied with current conditions but more pessimistic about the future.
Expectations for inflation in the year ahead plunged. The expected rate of inflation over the next year fell to 3.5 percent, the lowest it has been since January of last year. The expected inflation rate over the next five years inched up to 3.4 percent from 3.3 percent in January.