Consumer Sentiment Hits Highest Level Since August Despite Persistent Inflation, Job Market Concerns

12:42 PM EST, 02/06/2026 (MT Newswires) -- US consumer sentiment reached its highest reading since August, but remained low compared with year-ago levels amid persistent concerns related to inflation and the labor market, preliminary results from a University of Michigan survey showed Friday.

The main sentiment index rose to 57.3 this month from 56.4 in January. The consensus was for a 55 print in a Bloomberg poll. Annually, sentiment dropped 11% in February, according to the University of Michigan survey.

"While sentiment is currently the highest since August 2025, recent monthly increases have been small -- well under the margin of error -- and the overall level of sentiment remains very low from a historical perspective," Surveys of Consumers Director Joanne Hsu said in a statement. "Concerns about the erosion of personal finances from high prices and elevated risk of job loss continue to be widespread."

On Thursday, a report by Challenger Gray & Christmas showed that last month's job cut announcements in the US soared to the highest since October, driven by layoffs at United Parcel Service (UPS) and Amazon (AMZN) . US job openings fell in December, while weekly applications for unemployment insurance increased more than expected, two separate reports showed.

"Recently labor market data suggests that the ripple effect of the tariff announcements negatively affected hiring throughout most of 2025," Jefferies Chief US Economist Thomas Simons said in a note e-mailed to MT Newswires Friday. "Sluggish hiring and the constant drumbeat from public companies regarding their struggles with tariffs and uncertainty has driven an increase in consumer anxiety over their job security."

The official nonfarm payrolls report for January is expected to be released Wednesday instead of Feb. 6 as originally scheduled. A partial government shutdown that ended earlier this week caused the delay. The US economy is expected to have added 68,000 jobs last month, compared with a 50,000 gain reported for December, according to a Bloomberg poll.

The gauge for current economic conditions increased to 58.3 in February from 55.4 last month, topping the Street's view for 53.7, the consumer sentiment survey showed. The expectations measure decreased to 56.6 from 57, but ahead of market estimates for 55.1. Both indexes logged double-digit percentage declines year over year.

Year-ahead inflation expectations fell to 3.5% this month from 4% in January, hitting the lowest since January 2025. The five-year inflation outlook ticked up to 3.4% from 3.3%.

"Further declines in inflation expectations will help to buoy sentiment towards overall financial health, but getting back down towards pre-pandemic levels is still likely going to take a long time," Simons said.

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