After exploding higher (to 4.3%) in the preliminary February data, UMich’s final print for inflation expectations (1Y) was the same but the medium-term (5-10Y) expectation shot up to 3.5% – its highest since April 1995
Source: Bloomberg
In the flash data, UMich noted that the partisan divide over inflation expectations (1Y) was an extreme record (Democrats +5.1%, but Republicans 0.0%) and the final data confirmed that…
Source: Bloomberg
But for the 5-10Y inflation expectation, the partisan divide grew even more with Democrats convinced long-term inflation will be at 4.2% while Republicans see it closer to 1.5%…
Source: Bloomberg
UMich’ Director Joanne Hsu notes that Consumer sentiment extended its early month decline, sliding nearly 10% from January.
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The decrease was unanimous across groups by age, income, and wealth. All five index components deteriorated this month, led by a 19% plunge in buying conditions for durables, in large part due to fears that tariff-induced price increases are imminent. Expectations for personal finances and the short-run economic outlook both declined almost 10% in February, while the long-run economic outlook fell back about 6% to its lowest reading since November 2023.
We remain unclear just how UMich is weighting their survey (or who they are asking) because their results are a considerable outlier…