Consumer sentiment has perked back up to its highest level since April

Minneapolis
CNN
 — 

As inflation continues on a slow and steady descent, consumer sentiment is climbing back up out of a trough hit last year.

The University of Michigan’s closely watched consumer sentiment index jumped to 64.6 in the preliminary January survey, according to data released Friday. That’s up 8.2% from December’s 59.7 reading, but 3.9% below where it was 12 months earlier.

Economists were anticipating the index to measure 60.5, according to consensus estimates on Refinitiv.

The survey also showed that consumers’ inflation expectations for this year and five years out were 4% and 3%, respectively. The year-ahead inflation expectations reading is at its lowest since April 2021.

Inflation expectations are key data points for the Federal Reserve. If consumers believe prices will remain high, that could factor in to increased wage demands, which could cause businesses to raise prices.

This story is developing and will be updated.