Consumer Sentiment Rebounds as Year-Ahead Inflation Outlook Hits 11-Month Low, Survey Shows

01:05 PM EST, 12/05/2025 (MT Newswires) -- US consumer sentiment picked up after a four-month deterioration, while year-ahead inflation expectations hit the lowest in 11 months, preliminary results from a University of Michigan survey showed Friday.

The main sentiment index rose to 53.3 in December from 51 in November. The consensus was for a 52 reading in a Bloomberg-compiled survey.

"This month's increase was concentrated primarily among younger consumers," Surveys of Consumers Director Joanne Hsu said in a statement. "Overall, while views of current conditions were little changed, expectations improved, led by a 13% rise in expected personal finances, with improvements visible across age, income, education, and political affiliation."

Year-ahead inflation expectations fell to 4.1%, the lowest since January, from November's 4.5%. It also marked the fourth straight month of decline. The five-year inflation outlook dropped to 3.2% from 3.4% last month.

"It seems that consumers are somewhat less concerned that tariffs are going to cause another surge in inflation, and some are also probably looking forward to tax refunds in the Spring that are meaningfully larger than they were last year," Jefferies Chief US Economist Thomas Simons said in a report e-mailed to MT Newswires.

The gauge for current economic conditions ticked down to 50.7 -- a record low, according to Simons -- from 51.1 in November, while the expectations measure jumped to 55 from 51.

"Labor market expectations improved a touch but remained relatively dismal," Hsu said. "Consumers see modest improvements from November on a few dimensions, but the overall tenor of views is broadly somber, as consumers continue to cite the burden of high prices."

Consumer spending growth slowed in September, while the Federal Reserve's preferred inflation metric decelerated at the annual level, delayed government data showed Friday.

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