The preliminary UMich Index of Consumer Sentiment rose to 53.3 in December (+4.5% MoM, -28.0% YoY), showing a modest month-to-month improvement but still reflecting markedly weaker confidence than a year earlier.

• The Current Economic Conditions Index slipped to 50.7 (-0.8% MoM, -32.5% YoY), indicating little change in households’ assessment of present conditions and underscoring continued strain from high prices.

• The Index of Consumer Expectations increased to 55.0 (+7.8% MoM, -25.0% YoY), driven by a 13% rise in expected personal finances, with gains spread across demographic groups.

• Despite the improvement in expectations, the report notes that expected personal finances remain nearly 12% below levels seen at the start of the year, showing only partial recovery.

• Labor market expectations improved slightly but were still described as “relatively dismal,” signaling cautious views on future job prospects.

• Year-ahead inflation expectations fell to 4.1% (from 4.5%), the lowest since January 2025 and the fourth straight monthly decline, though still above the 3.3% level seen in January.

• Long-run inflation expectations eased to 3.2% (from 3.4%), matching early-2025 readings but remaining above typical pre pandemic ranges noted for 2019–2020.

• The survey highlights that despite some month-to-month improvement, overall sentiment remains broadly somber as consumers continue to cite the persistent burden of high prices.

December Preliminary 2025 Update: Current versus Pre-Pandemic Long-Run Inflation Expectations