The preliminary UMich Index of Consumer Sentiment rose to 54.0 in January (+2.1% MoM, -24.7% YoY), marking a second straight monthly gain but still reflecting significantly weaker confidence than a year earlier.

• The headline index increased from 52.9 in December to 54.0 in January, the highest level since September 2025, indicating modest recent improvement in overall sentiment.

• The Current Economic Conditions Index rose to 52.4 (+4.0% MoM, -30.2% YoY), showing a small improvement in perceptions of present conditions while remaining deeply negative compared with last year.

• The Index of Consumer Expectations edged up to 55.0 (+0.7% MoM, -20.9% YoY), suggesting slightly better views of the outlook, though expectations remain well below early-2025 levels.

• Gains in January were concentrated among lower-income consumers, while sentiment declined for higher-income households, pointing to uneven improvements across income groups.

• Despite two months of improvement, overall sentiment remains nearly 25% below January 2025, with respondents continuing to cite high prices and softening labor markets as primary concerns.

• Year-ahead inflation expectations held steady at 4.2%, the lowest since January 2025 but still well above the 3.3% level recorded a year earlier.

• Long-run inflation expectations rose slightly to 3.4% (Dec: 3.2%), remaining above the 2.8–3.2% range seen in 2024 and pre-pandemic norms.