US UMich January prelim consumer sentiment 54.0 vs 53.5 expected

The preliminary consumer sentiment index for January from the University of Michigan came in at 54.0, surpassing the expected figure of 53.5. The final reading for December was 53.3. Expectations for 1-year inflation rose to 4.2%, up from 4.1% previously, while 5-year inflation expectations increased to 3.4% from 3.2%. Current conditions improved to 52.4 from the previous 50.7. Expectations also rose to 55.0 from 54.6. However, this indicator is considered less reliable as responses are becoming more politicized and inflation data is quite volatile. The last significant impact of this data was during the COVID-19 pandemic when a spike in inflation expectations prompted the Fed to consider stronger rate hikes, only for those spikes to be later revised down. Overall, the report suggests a better mood among consumers and indicates solid, if not spectacular, holiday spending.