US Macro

Consumer Sentiment (University of Michigan)

The University of Michigan Consumer Sentiment Index is the oldest continuous survey of US household economic confidence — running since 1946. It captures how Americans feel about their personal financial situation and the broader economy, which then predicts how they'll actually spend. Sentiment surveys are imperfect, but the U-Mich data has decades of demonstrated leading-indicator value.

May 14, 2026UMCSENTconsumer-sentiment · us-macro · leading-indicator · surveys

UMICH

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The longest continuous survey of how American households feel about the economy. The University of Michigan has been asking the same five core questions every month since 1946 — through the post-WWII boom, the 1970s stagflation era, the 1980s Volcker recession, the 2008 financial crisis, the 2020 pandemic, and the 2022 inflation peak. The result is the canonical sentiment data series, with 79 years of context for any current reading.

UMICH

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What it measures

The University of Michigan Consumer Sentiment Index is published monthly by the University of Michigan's Survey Research Center:

The series we track — FRED UMCSENT — is the headline Consumer Sentiment Index, published monthly. The release schedule: a "preliminary" reading typically mid-month (around the 15th) and a "final" reading near the end of the month. Both are at 10:00 AM ET on their respective release days.

The survey covers approximately 600 US households via telephone interviews each month. The five core questions are:

Current financial situation vs. a year ago
Expected financial situation 1 year from now
Expected business conditions over next 12 months
Expected business conditions over next 5 years
Major-purchase intentions (cars, homes, appliances)

Responses are scored and combined into the headline index plus two sub-indices: Current Conditions and Consumer Expectations. The Expectations Index is generally more useful as a leading indicator.

The all-time high (since 1946) is approximately 111.4 in February 2000, during the dot-com peak. The all-time low is 50.0 in June 2022, during the inflation shock. Recent readings (mid-2025) have been in the 65-75 range — historically subdued, even though most macro data has been positive.

Why it matters

Two angles.

The leading-indicator-for-spending angle. Consumer sentiment leads consumer spending — particularly for major-purchase categories where households can defer or pull forward (autos, appliances, vacations, home renovations). When sentiment declines sharply, households tend to postpone discretionary purchases; when sentiment improves, those deferred purchases get released into the economy. The relationship is statistically significant but loose — sentiment is one input alongside income, employment, and credit access. For Fed officials and macro analysts, sentiment is a useful "vibe check" on what consumers are likely to do over the next 2-6 months.

The inflation-perception angle. U-Mich Consumer Sentiment is unusually sensitive to inflation — particularly gasoline prices, food prices, and broad cost-of-living indicators. When inflation surges, sentiment falls more than the underlying economic data would suggest. This makes the index a useful gauge of "inflation pain" as experienced by households, which is politically important and which has implications for spending behavior at the lower-income tier. The 2022 all-time low (50.0) was directly attributable to the inflation shock, not to the broader macro environment (unemployment was 3.5%, GDP was growing, equity markets had retreated but not crashed).

What moves it, and what it moves

Moves U-Mich Sentiment:

Inflation, especially gasoline prices. The single largest driver. Gas prices are the most visible weekly inflation signal for households.
Labor market conditions. Strong NFP, low unemployment, rising wages all support sentiment. Weakness in any of these compresses it.
Equity market performance. Wealth-effect channel — when stocks are up, households feel better about the economy.
Mortgage rates and housing affordability. Major-purchase-intention sub-index responds strongly to housing conditions.
Political events and party affiliation. Election outcomes can shift sentiment by 10+ index points within months for the relevant partisan respondents.
News-cycle dynamics. Major events (wars, banking crises, pandemic news) move sentiment within weeks.

U-Mich Sentiment moves:

Discretionary consumer-spending decisions (with 1-3 month lag).
Auto sales (sentiment is a meaningful predictor of vehicle purchase decisions).
Equity-market sentiment in consumer-discretionary sectors.
Federal Reserve policy considerations (Powell has cited sentiment-driven inflation expectations in press conferences).
Political and media commentary about "how the economy feels."

A worked example: the 2022 historic low

The U-Mich Consumer Sentiment Index entered 2022 around 70.0 — already historically subdued (the long-run average is ~85). The 2022 trajectory was unprecedented:

January 2022: 67.2 — concerns about inflation and the looming Fed hiking cycle
February-March 2022: 62.8 to 59.4 — Russia's invasion of Ukraine drove energy and food prices higher
May 2022: 58.4 — sustained inflation pressure
June 2022: 50.0 — the all-time low in the survey's 76-year history

The June 2022 trough at 50.0 was lower than:

The 2008 financial crisis trough (55.3 in November 2008)
The 1981-1982 Volcker recession (51.7 in May 1980, the previous all-time low)
Every other recession in the survey's history

The drivers in June 2022:

CPI YoY had reached 9.1% (the June 2022 peak)
Average US gasoline price: $5.01/gallon — the highest ever
30-year mortgage rate: 5.7% (rising rapidly from 3.2% at year-start)
S&P 500: down 24% YTD
Russia-Ukraine war: ongoing, with global supply-chain consequences

What was particularly remarkable: the unemployment rate was 3.6% — near a 50-year low. By traditional macro metrics, the economy was strong. The all-time-low sentiment reading reflected the unusual experience of high inflation eroding real purchasing power, even while job security was elevated.

The recovery from the 2022 trough was gradual:

June 2023: ~64
June 2024: ~68
2025: 65-75 range

Sentiment has stayed below the long-run average of 85 for the entire post-2022 period — despite cooling inflation, robust labor market, and equity-market strength. The persistent depression in sentiment is one of the macro puzzles of the current cycle.

The current cycle, and the open question

The debates around consumer sentiment:

Why does sentiment remain subdued despite "good" macro data? Several explanations: (a) the lingering effect of high prices — sentiment may take years to recover from a major inflation shock even after inflation itself moderates; (b) housing affordability remains poor — high mortgage rates have made home purchasing dramatically more difficult; (c) partisan effects — sentiment-tracking studies suggest political-identity dynamics are amplifying short-term swings; (d) household debt is elevated — credit card balances and delinquencies have risen.
The "vibecession" framing. Multiple economists have written about a "vibecession" — the disconnect between traditional macro data (good) and consumer sentiment / political mood (bad). Whether this represents a genuine signal that macro data is missing something, or whether it's a measurement artifact of survey methodology, is debated.
Predictive value going forward. Whether U-Mich sentiment continues to be a useful leading indicator, given its recent disconnect from realized spending behavior, is increasingly questioned. Some Fed officials have publicly downweighted sentiment data in their reaction functions.
Sub-index divergences. The Current Conditions sub-index vs. the Expectations sub-index can diverge — current conditions are typically stronger than expectations, reflecting concerns about the future. The spread is itself a useful read on the "vibe" gap.

What you watch: monthly preliminary and final releases (typically 15th and 28th of each month); the headline index level vs. the long-run 85 average; the Current Conditions vs. Expectations spread; party-affiliation breakouts (when available); and inflation-expectations sub-data within the survey (U-Mich also collects 1-year and 5-year inflation expectations from the same respondents).

FAQ

How is the U-Mich Consumer Sentiment Index actually measured?

The University of Michigan's Survey Research Center conducts monthly telephone interviews with approximately 600 US households (occasionally up to 1,200 in stress events). The survey asks five core questions about current financial conditions, expected financial conditions, business conditions over the next 12 months, business conditions over the next 5 years, and major-purchase intentions. Responses are scored, normalized to a 1966 base year (1966 = 100), and combined into the headline Consumer Sentiment Index. Two sub-indices are also published: the Current Conditions Index and the Consumer Expectations Index. The Expectations Index is often more useful as a leading indicator than the headline — it captures forward-looking sentiment rather than backward-looking assessments.

What's the U-Mich vs Conference Board difference?

Two separate consumer-sentiment series — both useful, both watched. The University of Michigan Consumer Sentiment Index (UMCSENT, our series) emphasizes personal financial conditions. The Conference Board's Consumer Confidence Index emphasizes labor market conditions more heavily. They typically track each other directionally but can diverge in important ways — for example, the Conference Board's index has historically been more sensitive to the labor market (it asks about job availability), while the U-Mich index has been more sensitive to inflation expectations. Both series are published monthly; U-Mich publishes a preliminary reading mid-month and a final reading near the end of the month. The Conference Board publishes around the same time. Most professional analysis tracks both.

Why did U-Mich Consumer Sentiment hit an all-time low in 2022?

The June 2022 reading of 50.0 was the lowest in the survey's 76-year history — lower than any month during the 2008 financial crisis (trough of 55.3), the 2009 recession (trough of 67.4), or the 1980 stagflation era (the previous low of around 50.0). The 2022 trough reflected the unusual combination of high inflation (8.5%+ CPI), rising interest rates (mortgage rates approaching 6%), gas prices spiking on the Russia-Ukraine war (US gas prices peaked at ~$5/gallon in June 2022), and supply-chain dislocations creating shortages and pricing pressure on everyday goods. The combination — high inflation, falling real wages, rising borrowing costs, geopolitical uncertainty, gas-pump pain — produced sentiment readings worse than any prior recession episode, despite the unemployment rate being at historic lows. The episode illustrated that sentiment surveys can capture lived experience of inflation in ways that traditional macro data can't.

Do consumer sentiment surveys actually predict spending?

Partially. The relationship between sentiment and spending is statistically significant — measured by various academic studies — but the correlation isn't perfect. Sentiment changes typically lead spending changes by 1-3 months for major-purchase decisions (cars, appliances, vacations) and lead longer for housing decisions. But sentiment can also be persistent in ways that don't show up in immediate spending: consumers may feel pessimistic but continue spending out of inertia, savings, or necessity. The post-COVID period has been particularly interesting because sentiment has remained subdued while consumer spending has stayed strong — partly because the inflation-driven sentiment hit didn't fully translate to spending given strong nominal wage growth and accumulated pandemic savings. The relationship is loose enough that sentiment surveys are useful but not deterministic.

What's the relationship between U-Mich sentiment and political events?

Strong and increasingly bidirectional. Consumer sentiment has been measurably affected by election outcomes and partisan media for at least 15 years. Studies have shown that survey respondents who identify with one party have higher confidence when their party holds the White House; vice versa for the opposing party. This creates a 'consumer sentiment political tilt' that can dominate short-term variation. The U-Mich researchers have begun publishing party-affiliation-stratified data showing this dynamic explicitly. The practical implication: when interpreting consumer-sentiment changes during periods of political transition (Nov 2016, Nov 2020, Nov 2024), economists should look at the underlying sub-indices and party breakouts rather than just the headline. The aggregate sentiment number can swing dramatically on a single political event without any change in underlying economic conditions.