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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.
79 lines
4.9 KiB
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79 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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January 2025 survey results January 24, 2025
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Joanne Hsu, PhD, Director
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Consumer sentiment fell for the first time in six months, edging down 4%
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from December. While assessments of personal finances inched up for the
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fifth consecutive month, all other index components pulled back. Indeed,
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sentiment declines were broad based and seen across incomes, wealth, and
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age groups. Buying conditions for durables softened but remained about
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30% better than six months ago amid persistent views that purchasing now
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would avoid future price increases. Despite reporting stronger incomes
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this month, concerns about unemployment rose; about 47% of consumers
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expect unemployment to rise in the year ahead, the highest since the
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pandemic recession. January’s data closed on Inauguration Day, and
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consumers of all political leanings will continue to refine their views as Trump’s policies are clarified and implemented.
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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 3.2% this month, the same reading seen in November 2024. For both the short and long run,
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inflation expectations rose across income and educational groups. Concerns over the future trajectory of inflation were
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visible throughout the interviews and were tied to beliefs about anticipated policies like tariffs. Consumers continued to
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spontaneously express motives for buying-in-advance to avoid future price increases, and robust auto and retail sales data
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suggest that consumers are indeed acting on these views.
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Consumers’ concerns over the path of inflation appear closely tied to their views on anticipated economic policies under
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the new president. Since the election, inflation expectations have risen for Democrats and fallen for Republicans. These
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trends are consistent with historical patterns. During the Trump to Biden transition, the inflation expectations of Republicans
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and Democrats similarly rotated around the national average, albeit against a backdrop of sustained low inflation in the
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2010s. This month’s interviews make it abundantly clear that the current divergence in inflation expectations is shaped by
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beliefs about future policy, rather than a form of political expression divorced from economic factors.
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In January, consumers were asked if they thought higher tariffs would be better for the economy, or if lower tariffs would
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be better, or if tariff policy would make no difference for the economy. As seen in the chart, about 19% of consumers
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reported higher tariffs would be better for the economy, while 62% favored lower tariffs. Strikingly, those favoring higher
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tariffs had much lower inflation expectations, both year-ahead and long-run, than those favoring lower tariffs and those who
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believed tariff policy has little economic impact. These patterns suggest that consumers expect Trump to hold true to his
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plan to hike tariffs and have incorporated the anticipated policy change into their economic expectations.
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Responses to the tariff question were not fully correlated with party affiliation; less than half of Republicans reported that
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higher tariffs would be better for the economy. Younger, more-educated, or higher-income consumers were more likely to
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favor lower tariffs for the economy. Note that the interview focused on the perceived impact of tariffs on the economy,
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rather than the overall policy preferences of the consumer. Some consumers may believe that lower tariffs are better for the
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economy but prefer higher tariffs for non-economic reasons, say as a negotiating strategy or to advance other goals.
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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 2025
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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 71.1
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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 74.0
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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 69.3
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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 86
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Personal Finances - Expected 122 116 122 116 111 106 105 108 111 110 116 111 108
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Economic Outlook - 12 Months 93 93 95 92 79 84 86 88 93 92 97 88 81
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Economic Outlook - 5 Years 94 92 94 96 84 88 84 92 94 95 96 94 88
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Buying Conditions - Durables 111 106 109 109 88 88 81 78 82 85 82 108 104
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-1
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0
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1
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2
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3
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4
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5
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Higher Tariffs
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Better for Economy
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(19% of Consumers)
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Lower Tariffs
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Better for Economy
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(62% of Consumers)
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No Difference
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for Economy
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(19% of Consumers)
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Median Inflation Expectations %
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Inflation Expectations Reflect Views on Policies
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Consumers who Favor Higher Tariffs Expect Lower Inflation
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Year-Ahead Inflation
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Expectations
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Long-Run Inflation
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Expectations
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