U.S. consumer sentiment rises to six-month high in early February

The University of Michigan's Consumer Sentiment Index rose to 57.3 in February, the highest since last August, while concerns about high prices and job risk remained widespread.

U.S. consumer sentiment increased to a six-month high in February, the University of Michigan's Surveys of Consumers reported. The Consumer Sentiment Index rose to 57.3 from 56.4 in January. The survey was completed before a recent stock market selloff linked to heavy AI-related spending by some technology firms. Consumers continued to report broad concerns about rising prices and the risk of job loss. Key findings: - The Consumer Sentiment Index was 57.3 in February, the highest reading since August. - This marked the third consecutive monthly improvement, though the index remained about 20% below its January 2025 level. - Gains in sentiment were concentrated among consumers with the largest stock portfolios, a pattern described as a "K-shaped" divergence between higher- and lower-income households. - Consumers reported widespread worries about erosion of personal finances from high prices and elevated risk of job loss. - One-year inflation expectations fell to 3.5% from 4.0%, while five-year expectations edged up to 3.4%. - The survey was finished before this week's stock selloff; markets later rebounded and U.S. Treasury yields rose. Summary: The report shows a modest rise in consumer sentiment driven mainly by those with sizable stock holdings, alongside persistent concerns about prices and jobs. Officials and economists noted the data will be weighed alongside upcoming employment reports when assessing monetary policy, with the timing and influence on the Federal Reserve's March decision reported as dependent on January and February labour-market data.