University of Michigan Inflation Expectations report for December 2024

Consumer Sentiment Beats Expectations at 70.5 as Inflation Outlook Improves

Oct 25, 2024, 02:06 PM

The University of Michigan Consumer Sentiment Index for October rose to 70.5, exceeding expectations of 69.1 and reaching its highest level since April 2024. The increase was driven primarily by a surge in sentiment among Republicans, which rose from 49.7 to 53.6, while sentiment among Democrats declined. Current conditions among Republicans increased from 34.6 to 41.4. Consumers were less concerned over high interest rates for large purchases. Inflation expectations for the next year fell to 2.7%, below estimates of 2.9% and lower than the pre-pandemic average of 2.9%. Five-year inflation expectations remained steady at 3.0%. Despite recent gains, overall consumer sentiment remains below the levels seen in 2019 and 2021.