Consumer sentiment in the United States showed a modest rebound in February, reaching its highest level since last August, according to the University of Michigan’s Index of Consumer Sentiment. The reading came in at 57.3, up 1.6 points from January, surpassing economists’ expectations of a decline to 55. While this represents an encouraging short-term improvement, sentiment remains significantly below last year’s highs, reflecting ongoing concerns about inflation, job security, and long-term economic stability.
Compared with February 2025, when sentiment stood at 64.7, the index is down 11.4%, and roughly 20% below the peak levels recorded last year. Joanne Hsu, director of surveys of consumers at the University of Michigan, emphasized that “recent monthly increases have been small — well under the margin of error — and the overall level of sentiment remains very low from a historical perspective.” According to Hsu, Americans continue to worry about the erosion of personal finances due to high prices and the elevated risk of job loss.
The February report highlights mixed signals from the labor market. Jobless claims came in higher than expected this week, suggesting some near-term labor market pressures. Yet, data from Challenger, Gray & Christmas show that December job cuts were at their lowest level since 2023. Official jobs data from the Bureau of Labor Statistics (BLS) is scheduled for release on February 11, after delays caused by a partial government shutdown, which had postponed the initial report.
Inflation expectations also showed improvement in February. Survey respondents now anticipate a 3.5% increase in prices over the next year, down from 4% previously. This is the lowest expected inflation since January 2025, though it remains above the pre-pandemic range of roughly 2.3% to 3%. The BLS is set to release its latest inflation report on February 13, which will provide further clarity on the trajectory of price growth.
Interestingly, consumer sentiment appears increasingly tied to exposure to financial markets. Those with the largest stock portfolios reported surging confidence, while sentiment among households without stock holdings stagnated at historically low levels. Hsu noted that this divergence underscores the unequal impact of financial markets on Americans’ perceptions of the economy.
The survey also reflected nuanced changes in economic expectations. Modest improvements were reported in consumers’ assessments of current personal finances and buying conditions for durable goods, but these were offset by a slight decline in expectations for long-run business conditions. Overall, the February data presents a picture of cautious optimism: consumers are slightly more confident than in recent months, yet significant economic anxieties remain.
As Americans navigate high prices and labor market uncertainties, the path forward for consumer confidence remains fragile. Analysts will be closely watching upcoming jobs and inflation reports for further signals, particularly as financial market volatility and global economic pressures continue to influence sentiment. For now, February’s reading offers a small but notable lift in confidence, reminding policymakers and businesses alike that while the recovery is underway, it remains uneven across different segments of the population.