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U.S. Consumer Confidence Shows Modest Improvement
Consumer Sentiment Inches Higher in January
U.S. consumer sentiment increased for the second consecutive month in January, reaching its highest level since September 2025, according to the University of Michigan’s Surveys of Consumers. Despite the improvement, overall confidence remains nearly 25% below January 2025 levels, highlighting continued economic uncertainty.
While recent gains suggest some stabilization, consumers remain cautious as high prices and labor market softness continue to influence household decision-making.
Lower-Income Households Lead the Improvement
The increase in sentiment was largely driven by lower-income households, while confidence declined among higher-income consumers. This uneven recovery underscores how economic pressures are being felt differently across income groups.
“While consumers perceived some modest improvement in the economy over the past two months, their sentiment remains well below year-ago levels,” said Joanne Hsu, director of the Surveys of Consumers. “They continue to focus on kitchen-table issues, such as high prices and softening labor markets.”
Inflation and Job Concerns Continue to Weigh on Confidence
Although tariff-related concerns have eased, consumers remain cautious about:
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Inflation trends
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Rising everyday costs
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Business conditions
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Employment stability
These ongoing concerns are limiting stronger gains in overall consumer confidence.
Inflation Expectations Remain Elevated
January inflation expectations showed limited improvement:
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One-year inflation outlook: 4.2%, the lowest since January 2025
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Long-term inflation outlook: 3.4%, still above historical norms
Elevated inflation expectations suggest consumers remain guarded about long-term economic stability.
For Home Buyers and Sellers
Consumer sentiment plays a critical role in housing decisions. When confidence improves—even modestly—buyers and sellers are more likely to plan, research, and act. However, continued caution means consumers are prioritizing value, timing, and expert guidance over impulsive decisions.
Work With Laura Graves Real Estate
In times of economic uncertainty, local market expertise and strategic insight matter more than ever.
Laura Graves Real Estate helps buyers and sellers:
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Navigate changing market conditions with confidence
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Understand how economic trends impact pricing and timing
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Make informed real estate decisions backed by real-time market data
📍 Thinking about buying or selling while consumer confidence slowly improves?
📍 Looking for expert guidance in a cautious but active market?
Connect with Laura Graves Real Estate today:
786-457-8001
