Michigan’s Consumer Sentiment Index rose to 54 in January’s preliminary reading from a final reading of 52.9 in December.
“Improvements in January were seen among lower-income consumers, while sentiment fell for those with higher incomes,” Surveys of Consumers Director Joanne Hsu noted.
The report found that year-ahead inflation expectations were steady at 4.2% to start January, which is the lowest reading since January 2025 but well above that month’s 3.3% inflation expectations.
“All told, while consumers perceived some modest improvement in the economy over the past two months, their sentiment remains nearly 25% below last January’s reading,” Hsu added.
“They continue to be focused primarily on kitchen table issues, like high prices and softening labor markets. Although consumers’ worries about tariffs appear to be gradually receding, they remain guarded about the overall strength of business conditions and labor markets,” she explained.