Year-ahead inflation expectations in US dive to lowest since December 2020

By Ovunc Kutlu

ISTANBUL (AA) - Year-ahead inflation expectations in the US plummeted to 2.9% in January, hitting their lowest reading since December 2020, a survey by the University of Michigan said Friday.

Long-run inflation expectations, meanwhile, fell to 2.8%, just below the 2.9%-3.1% range seen for 26 of the last 30 months, said the survey.

US consumer sentiment, meanwhile, jumped 13% in January to reach its highest level since July 2021, it added.

The index of consumer sentiment increased 9.1 percentage points to 78.8 in January, from 69.7 in December, according to the survey's preliminary results.

The figure also beat market expectations, which estimated the index to come in at 70.0.

"Consumer views were supported by confidence that inflation has turned a corner and strengthening income expectations," Surveys of Consumers Director Joanne Hsu said in a statement.

"Sentiment has now risen nearly 60% above the all-time low measured in June of 2022 and is likely to provide some positive momentum for the economy. Sentiment is now just 7% shy of the historical average since 1978," she added.

The index of current economic conditions soared 10 points to 83.3 in January, from 73.3 in December, according to the survey results.

The index of consumer expectations rose 8.5 points to 75.9 from 67.4 during that period.