The University of Michigan’s Consumer Sentiment Index dropped to 61.7, from 67.2 in January and down from a 76.8 reading in February 2021. Economists expected a reading of 67, according to a Bloomberg survey. The future expectations index plunged 6.7 points from January to 57.4, the lowest reading in more than a decade. The current condition index decreased from 72.0 in January to a 68.5 reading, the lowest since 2011.
The report noted among households with incomes of $100,000 or more, their sentiment index fell by 16.1% from last month and 27.5% from last year. Consumers expect inflation to be 5.0% for the next year, up 0.1 points from last month.
Reasons for the recent declines in the index have been driven by weakening personal financial prospects, primarily due to rising inflation and less confidence in the government’s economic policies.
