In the final data for UMich Consumer Sentiment survey, inflation expectations (both short- and long-term) surged higher in January...

...but it's all Democrats who see prices up 4.2% in the next year (while Republicans expect barely any change in prices)...

Concerns over the future trajectory of inflation were visible throughout the interviews and were tied to beliefs about anticipated policies like tariffs.

Consumers continued to spontaneously express motives for buying-in-advance to avoid future price increases, and robust auto and retail sales data suggest that consumers are indeed acting on these views.

Overall, this led to the headline sentiment index's first MoM decline in six months...

While assessments of personal finances inched up for the fifth consecutive month, all other index components pulled back. Indeed, sentiment declines were broad based and seen across incomes, wealth, and age groups.

Despite reporting stronger incomes this month, concerns about unemployment rose; about 47% of consumers expect unemployment to rise in the year ahead, the highest since the pandemic recession.

Democrats expect 4.2% inflation this year, Republicans not so much...
{ai:summary}The UMich Consumer Sentiment survey revealed a rise in inflation expectations for both the short and long term in January, with Democrats anticipating a 4.2% price increase, while Republicans expect minimal change. Concerns about inflation and unemployment are influencing consumer behavior.Despite a slight improvement in personal finance assessments, overall sentiment declined for the first time in six months, with broad reductions across various demographics. Nearly half of consumers foresee rising unemployment, the highest level of concern since the pandemic recession. #economy

UMich Inflation Expectations Soar As Democrats Panic

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