Consumer Sentiment Stable, Inflation Expectations Rise: Michigan University Survey

By Tom Ozimek
Tom Ozimek
Tom Ozimek
Tom Ozimek is a senior reporter for The Epoch Times. He has a broad background in journalism, deposit insurance, marketing and communications, and adult education.
January 17, 2020Updated: January 17, 2020

Researchers at the University of Michigan said U.S. consumer sentiment remained stable in January, with the index dipping slightly, by 0.2 points, from the previous month.

The Michigan sentiment gauge shows how consumers view their personal financial situation and broader buying conditions.

Figures from the index, published on Jan. 17, show that the measure for January 2020 was 99.1, down slightly from 99.3 in December 2019.

Relative to January 2019, sentiment grew by 8.66 percent year-over-year.

Epoch Times Photo
University of Michigan: Consumer Sentiment, part of the University of Michigan Surveys of Consumers. (Source: University of Michigan, Federal Reserve Bank of St. Louis)

“Consumer sentiment remained virtually unchanged in early January, differing by just 0.2 Index-points from December,” said University of Michigan Surveys of Consumers chief economist, Richard Curtin. “This stability extended to all components, both current assessments as well as future economic prospects.”

The Michigan survey also showed the index of current economic conditions was up 0.3 points month-over-month, growing from 115.5 to 115.8. Also, the expectations index was down 0.6 points month-over-month, falling from 88.9 to 88.3.

“I wouldn’t view the changes in sentiment, current conditions, or expectations as material,” said Greg McBride, Chief Financial Analyst at, in a statement to The Epoch Times. “Much more like typical month-to-month noise.”

McBride said that what he found most notable about the survey was the upward movement in inflation expectations.

Consumers polled by University of Michigan researchers said in December they expected inflation in 2020 to come in at 2.3 percent. January numbers showed an uptick in inflation expectations for the year, with respondents saying they believed prices to grow by 2.5 percent. Similarly, inflation expectations for the next five years were 2.2 percent in December, growing to 2.5 percent in January.

“It is likely a reflection of concerns that Mideast unrest will lead to higher oil prices, but also that the tight labor market is creating wage pressures that will ultimately filter through to broader consumer goods and services,” McBride explained.

Geopolitical and economic shocks can cause sentiment to fall. A review of figures from the past two decades shows the gauge hitting multiple lows around the time of the 2007-08 financial crisis.

Epoch Times Photo
University of Michigan: Consumer Sentiment, part of the University of Michigan Surveys of Consumers. (Source: University of Michigan, Federal Reserve Bank of St. Louis)

In commentary to the findings, Curtin singled out President Donald Trump’s impeachment, saying the issue “was barely mentioned—just by 1 percent of consumers,” adding that the matter “had a negligible impact on the overall level in consumer sentiment.”

“The current expansion has established a new record length largely due to consumer spending,” he said. “Consumers will continue to sustain the expansion due to their favorable judgements about their current and prospective financial situation.”

Jobs and wages are key components of sentiment. The U.S. labor market remains strong, with unemployment at 3.5 percent, near historic lows.

“Overall, there seems to be a positive outlook for the economy—low unemployment coupled with a strong labor market,” said John Karr, COO at, in a statement to The Epoch Times. “This economic growth will boost consumer confidence and consumer spending, which in turn will accelerate U.S. economic growth,” he predicted.