On February 6th, the University of Michigan released a report on American consumer confidence, indicating a slight increase for the third consecutive month in the preliminary data of the Consumer Confidence Index for February, reaching its highest level since August of last year. At the same time, the one-year inflation expectation has dropped to its lowest level since January 2025.
The report revealed that the Consumer Confidence Index stood at 57.3 for February, up from 56.4 in January, marking a 1.6% increase month-on-month and reaching its highest level since August 2025. The Current Economic Condition index was 58.3, a 5.2% increase from January’s 55.4, while the Index of Consumer Expectation was 56.6, slightly lower than January’s 57, with a decrease of 0.7%. However, all three indices showed declines of over 11% compared to the same period in 2025.
Joanne Hsu, the director of the consumer survey report, evaluated the February report, stating that “consumers with more stock assets have seen a significant increase in confidence, while those without stocks have remained stagnant at a rather low level of confidence. Overall, the slight improvement in personal financial conditions and durable goods purchase conditions has been offset by a slight deterioration in the long-term business environment.”
She pointed out that the increase in consumer confidence from the previous month was less than one index point, indicating minimal change overall. Despite the current consumer confidence being at its highest point since August 2025, the recent monthly increases have been limited, significantly below the margin of error. Looking at it historically, the overall confidence level remains very low. Concerns about high prices eroding personal finances and persistent risks of unemployment are still prevalent. The interviews for this report covered the two-week period up to this past Monday.
Of note, the one-year inflation expectation in the United States is on the decline. The one-year inflation expectation for February has decreased from 4.0% last month to 3.5% this month, marking the lowest level since January 2025.
However, Joanne Hsu noted, “This figure is still higher than in 2024 and notably higher than the range during the pre-pandemic years of 2.3% to 3.0%.”
The preliminary data for February shows that the long-term inflation expectation in the U.S. has seen a slight increase for the second consecutive month, rising from 3.3% last month to 3.4% this month. In comparison, the long-term inflation expectation in 2024 ranged from 2.8% to 3.2%, remaining below 2.8% between 2019 and 2020.