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Consumer sentiment
The University of Michigan's read on how people feel about money and the economy, and the inflation expectations inside it.
What it is
The University of Michigan's Surveys of Consumers ask a sample of Americans about their own finances, business conditions and whether now is a good time to buy big things. The answers roll up into the index of consumer sentiment, which has run since 1952. A preliminary reading comes out mid-month and the final reading two weeks later, both at 10:00 AM Eastern. Mini Macro plays the final.
How to read the numbers
The index is set so the first quarter of 1966 equals 100, and its long-run average sits in the mid 80s. Readings in the 50s are historically gloomy; the record low, 50.0, came in June 2022 when gas prices peaked. The final usually lands within a point or two of the preliminary, so the call is often about which way the late interviews tipped it.
The survey also asks what people expect inflation to be a year from now and five to ten years out. The Fed watches those answers closely, because expectations that drift up can make inflation harder to bring down.
Why markets care
Sentiment does not always match spending: people can say they feel terrible and keep shopping. But sharp drops tend to arrive with shocks, like a jump in gas prices, a market slide or a government shutdown, and the inflation-expectations answers can move bond yields on their own.