Consumer sentiment fell more than expected in February, while inflation expectations surged.
U.S. consumer sentiment declined more than expected in February to the lowest level in more than a year while expectations about inflation surged amid uncertainty surrounding President Donald Trump's tariff plans.
The University of Michigan Surveys of Consumers on Friday released its consumer sentiment index which dropped from 71.7 in January to 64.7 in February. That's the lowest reading since November 2023 and was weaker than the preliminary reading of 67.8, which was the consensus expectation among economists polled by Reuters.
Surveys of Consumers Director Joanne Hsu noted that while sentiment fell for both Democrats and Independents, it was unchanged for Republicans, which she wrote was reflective of "continued disagreements on the consequences of new economic policies."
Households' inflation expectations also rose to 4.3% over the next year – the highest level since November 2023 and a sharp uptick from 3.3% last month.