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Extract original preliminary and final results with publication dates and validated table headers. Add annual report discovery and real report fixtures covering cross-month releases and PDF text layout differences.
69 lines
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69 lines
4.9 KiB
Plaintext
© The University of Michigan, 2025. All rights reserved.
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Monitoring trends for over 75 years
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Preliminary results from the January 2025 survey January 10, 2025
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Joanne Hsu, PhD, Director
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Consumer sentiment was essentially unchanged in January, inching down
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less than one index point from December, well within the margin of error.
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Assessments of personal finances improved about 5%, while the economic
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outlook fell back 7% for the short run and 5% for the long r un. January’s
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divergence in views of the present and the future reflects easing concerns
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over the current cost of living this month, but surging worries over the future
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path of inflation. Overall, this month’s deterioration in the expectations index
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was se en acro ss political affiliation s, including decline s of about 3% for
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Independents and 1.5% for Republicans.
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Year-ahead inflation expectations soared from 2.8% last month to 3.3% this month. The current reading is the highest since
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May 2024 and is above the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations rose
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from 3.0% last month to 3.3% this month. This is only the third time in the last four years that long-run expectations have
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exhibited such a large one -month change. For both the short and long run , inflation expectations rose across multiple
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demographic groups, with particularly strong increases among lower -income co nsumers and Independents. Note that
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inflation uncertainty—as estimated using the interquartile range in inflation expectations —has climbed considerably over
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the past year, though it remains well below levels seen in the 1970s (see chart). October 2024’s special report provides
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additional context for understanding the path of long-run inflation expectations over the last seven years.
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Inflation expectations are being shaped by beliefs about future policy. The share of consumers worried about the prospect
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of tariff hikes continues to rise. Nearly one-third of consumers spontaneously mentioned tariffs, up from 24% in December
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and less than 2% prior to the election. These consumers generally report that tariff hikes will pass through to consumers in
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the form of higher prices, thus pushing up their inflation expectations.
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Concerningly, recent data show an emergence of inflationary psychology —motives for buying-in-advance to avoid future
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price increases, the proliferation of which would generate further momentum for inf lation. Like in December, 22% of
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consumers this month reported that purchasing durables now would enable buyers to avoid future price hikes, the highest
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since 1990. That said, these buy-in-advance price rationales were far more prevalent in the 1970s, averaging 41% in 1978.
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Expectations for the future weakened on other dimensions as well. Half of consumers expect unemployment rates to rise in
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the year ahead, up from 40% last month and 31% a year ago. This month’s worsening was concentrated among Independents
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and Republicans. Consumers’ expectations over their own income growth also fell from last month in both nominal and real
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terms. Only one-third of consumers expect interest rates to fall over the next year, down from 41% in December and falling
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for the fourth straight month. All told, consumers perceive numerous sources of downside risk to the economy.
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Despite their worries for the future, consumers are fully aware that current inflation has slowed over the past two or so
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years. In fact, the 4% increase in Current Conditions this month was largely supported by softening worries over current
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prices. About 32% of consumers spontaneously cited high prices as weighing down their personal finances, down from 47%
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in August 2024 and the lowest seen since February 2022. For buying conditions for large purchases, spontaneous mentions
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of high prices have fallen over the last five months for durable goods and are the lowest since May 2021 for vehicles.
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Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
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2024 2024 2024 2024 2024 2024 2024 2024 2024 2024 2024 2024 Prelim
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Index of Consumer Sentiment 79.0 76.9 79.4 77.2 69.1 68.2 66.4 67.9 70.1 70.5 71.8 74.0 73.2
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Current Economic Conditions 81.9 79.4 82.5 79.0 69.6 65.9 62.7 61.3 63.3 64.9 63.9 75.1 77.9
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Index of Consumer Expectations 77.1 75.2 77.4 76.0 68.8 69.6 68.8 72.1 74.4 74.1 76.9 73.3 70.2
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Index Components
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Personal Finances - Current 100 98 104 95 91 81 79 79 80 81 82 85 89
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Personal Finances - Expected 122 116 122 116 111 106 105 108 111 110 116 111 110
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Economic Outlook - 12 Months 93 93 95 92 79 84 86 88 93 92 97 88 82
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Economic Outlook - 5 Years 94 92 94 96 84 88 84 92 94 95 96 94 89
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Buying Conditions - Durables 111 106 109 109 88 88 81 78 82 85 82 108 112
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0
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2
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4
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6
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8
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10
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1977 1982 1987 1992 1997 2002 2007 2012 2017 2022
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Uncertainty - Year-Ahead Inflation Expectations
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Uncertainty - 5-10 Year Inflation Expectations
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Consumers Express Rising Uncertainty Over Path of Inflation
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Uncertainty Estimated by 75th Percentile – 25th Percentile of Expectations
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3-Month Moving Averages
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University of Michigan, January 10, 2025
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