A report from
the University of Michigan showed on Friday that the preliminary reading for
the Reuters/Michigan index of consumer sentiment declined 4.6 per cent m-o-m to
67.8 in early February. This was the lowest reading since July 2024 (66.4).
Economists had expected
the indicator would come in at 71.1 this
month, unchanged from the January
final reading of 71.1.
According to
the report, the index of current economic conditions plunged 7.2 per cent m-o-m to 68.7 in February, while the index of
consumer expectations dropped 2.9 per cent m-o-m to 67.3.
The report also
revealed that the estimates of year-ahead expected inflation soared from 3.3
per cent in January to 4.3 per
cent early this month, the highest level since November 2023 (4.5 per cent). At the same time, the 5-year expected inflation increased from 3.2 per cent to 3.3
per cent., the highest level since June 2008 (3.4 per cent).
Commenting on
the latest survey, Surveys of Consumers
Director Joanne Hsu unveiled that many consumers appear worried that high
inflation will return within the next year. “This is only the fifth time in 14
years we have seen such a large one-month rise (one percentage point or more)
in year-ahead inflation expectations,” she noted.