US consumer sentiment falls slightly as outlook for inflation worsens

Consumer sentiment about the U.S. economy has ticked down but remains near a recent high, with Americans’ outlook largely unchanged this year. The University of Michigan’s index, released in a preliminary version, showed that sentiment is about halfway between its all-time low, reached in June 2022 when inflation peaked, and its pre-pandemic averages. An increase in gas prices may have contributed to the decline in consumers’ outlook. Americans’ perceptions of future inflation also edged up, likely reflecting still-elevated prices. Consumers expect inflation to be 3.1% a year from now, which would exceed the Federal Reserve’s 2% target. Still, that would be below the current level of 3.5%.