Background on the University of Michigan Consumer Sentiment Index
The University of Michigan Consumer Sentiment Index is a monthly survey that measures consumer confidence in the United States. This index is widely regarded as an essential economic indicator, providing insights into consumer optimism and spending intentions. The survey is conducted by the National Finance Committee, under the direction of Richard Curtin, Director of Consumer Surveys at the University of Michigan’s Survey Research Center.
Who is Richard Curtin?
Richard Curtin, a distinguished economist and professor emeritus at the University of Michigan, has been leading the Consumer Sentiment Survey since 1978. His work has significantly contributed to understanding consumer behavior and its impact on the broader economy.
Key Findings from January 2026 Survey
According to the latest survey released on Friday morning, the University of Michigan Consumer Sentiment Index rose to 54.0 in early January, up from 52.9 in December. Economists surveyed by Reuters had predicted a slight increase to 53.5.
Consumer Concerns
Joanne Hsu, Director of Consumer Surveys at the University of Michigan, stated that while concerns about tariffs are gradually decreasing, consumers remain cautious regarding the overall strength of business conditions and labor markets.
“Consumers are still focusing primarily on ‘shelf-related’ issues, such as high prices and weakening labor markets,” Hsu added.
Inflation Expectations
The survey’s measure of consumers’ expectations for inflation over the next 12 months remained unchanged at 4.2%, while expectations for inflation over the next five years increased to 3.4% from 3.2% in the previous month.
Impact on the Economy
Consumer confidence is a crucial indicator of economic health, as it reflects consumers’ willingness to spend and invest. When consumer confidence is high, households are more likely to increase spending on durable goods, contribute to economic growth, and support job creation. Conversely, low consumer confidence can lead to reduced spending, slowing economic growth and potentially causing job losses.
Key Questions and Answers
- What is the University of Michigan Consumer Sentiment Index? It’s a monthly survey that measures consumer confidence in the United States, providing insights into consumer optimism and spending intentions.
- Who is Richard Curtin? Richard Curtin is a renowned economist and professor emeritus at the University of Michigan, who has been leading the Consumer Sentiment Survey since 1978.
- What did the January 2026 survey reveal? The University of Michigan Consumer Sentiment Index rose to 54.0 in early January, up from 52.9 in December. However, consumers remain concerned about inflation and weakening labor markets.
- What are consumers’ inflation expectations? For the next 12 months, consumers expect an average inflation rate of 4.2%. For the next five years, their expectations increased to 3.4%.
