CHICAGO, Feb. 21 (Xinhua) -- The Consumer Sentiment Index released Friday by the University of Michigan (UM) Surveys of Consumers fell to 64.7 in the February 2025 survey, down from 71.7 in January and below last February's 76.9.
The current index fell to 65.7, down from 75.1 in January and below last February's 79.4. The expectations index fell to 64.0, down from 69.5 in January and below last February's 75.2.
Following the Jan. 31 announcement that tariffs on China, Canada and Mexico would be implemented, year-ahead inflation expectations immediately surged.
Consumers expect prices to rise at an annual rate of 3.5 percent over the next five to 10 years; and about 40 percent of consumers spontaneously attributed their inflation worries to tariffs, up from 27 percent in January and less than 2 percent prior to the election.
Meanwhile, expectations for personal finances and the short-run economic outlook both declined almost 10 percent in February, while the long-run economic outlook fell back about 6 percent to its lowest reading since November 2023.
More than half of consumers expect unemployment to rise in the year ahead, the highest since the pandemic recession.
Views of personal finances broadly deteriorated in February as well, with almost 40 percent of consumers blaming high prices for eroding their living standards. Although a majority of consumers expect their incomes to rise, only 16 percent expect their income gains to outpace inflation.
"Consumers' expectations for the path of inflation worsened considerably this month; they are clearly bracing for a resurgence in inflation," said Joanne Hsu, director of UM's Surveys of Consumers.
The Surveys of Consumers is a rotating panel survey based on a nationally representative sample that gives each household in the coterminous United States an equal probability of being selected. Interviews are conducted throughout the month by telephone.
