US Sentiment Rises, But the "Heavy" Feeling Remains
US consumer sentiment is starting to improve. The University of Michigan Index for January 2026 was revised up to 56.4, higher than the preliminary reading of 54.0 and also up from 52.9 in December. This marks the second consecutive monthly increase and the highest level since August, with improvements felt across nearly all major components.
Interestingly, this strengthening sentiment is quite "evenly distributed." The increase occurred across various groups—from income level, education background, age, to political preferences. However, the overall picture has not yet fully recovered: overall, sentiment remains more than 20% lower than a year ago.
The reasons remain the same: consumers still feel high prices are stifling purchasing power. Furthermore, new concerns are emerging that the labor market could weaken, making some more cautious in spending and financial planning.
In terms of global issues, developments abroad are not considered to have significantly changed how consumers view the economy, beyond the debate over tariff policy. This means that the most pressing issues at home remain the cost of living and job security. Regarding inflation, there are some slightly reassuring signs. One-year inflation expectations fell to 4.0%, the lowest since January 2025. Meanwhile, long-term inflation expectations edged up to 3.3% from 3.2%, indicating the market still sees inflation as potentially declining, but it's not yet completely "fixed."
Source: Newsmaker.id
