Consumer sentiment declines to seven-month low amid high-inflation worries

U.S. consumers are growing less confident as they worry that high inflation will make a comeback this year.

The University of Michigan’s Index of Consumer Sentiment fell to 67.8 in a preliminary February reading, down from 71.1 in the prior month. It was the lowest reading since July. The metric is down 11.8% year-over-year.

Consumers views on current economic conditions decreased 7.2% in February to 68.7% from 74.0 the previous months. It’s down 13.% year-over-year.

Looking further out, the index of consumer expectations fell 2.9% in February to 67.3 from 69.3 the previous month. It’s down 10.5% year-over-year.

The drop in sentiment cut across political party lines and demographics, noted Joanne Hsu, surveys of consumers director.

“The decrease was pervasive, with Republicans, Independents, and Democrats all posting sentiment declines from January, along with consumers across age and wealth groups,” she said. “Furthermore, all five index components deteriorated this month, led by a 12% slide in buying conditions for durables, in part due to a perception that it may be too late to avoid the negative impact of tariff policy.”