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Final Michigan Sentiment Sees Notable Downtick in Inflation Expectations

US DATA

University of Michigan Sentiment (Dec F) M/M 59.7 vs. Exp. 59.1 (Prev. 59.1)

  • Current Conditions 59.4 vs. Exp. 60.3
  • Expectations 59.9 vs. Exp. 58.5
  • 1-Year Inflation 4.4% vs. Exp. 4.6%
  • 5-10 Year Inflation 2.9% vs. Exp. 3.0%

Highlights:

  • Consumers’ extremely negative attitudes have softened this month on the basis of easing pressures from inflation.
  • Year-ahead inflation expectations improved considerably but remained elevated, falling from 4.9% in November to 4.4% in December, the lowest reading in 18 months but still well above two years ago.
  • Declines in short-run inflation expectations were visible across the distribution of age, income, education, as well as political party identification

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