Consumer confidence steady but inflation expectations jump on tariff worries and employment expectations plunge

The first UoM consumer confidence read of the year comes in at 73.2 vs 74 in December and just below the estimate of no change of 74. The two key internals were mixed as Current Conditions rose 4.8 pts m/o/m but were offset by a 3.1 pt drop in Expectations. One yr inflation expectations jumped to 3.3% from 2.8% . That’s the highest since November 2023 and the 5-10 yr look also went to 3.3% from 3%. That’s the highest since 2008.

The thing that stands out the most, especially in light of the big upside surprise in the December jobs report, was the employment expectations component which plunged by 17 pts to 66. The last time it was lower was in July 2009 and yes, you should not believe the BLS report today as gospel as it will be revised many more times. Net income views did lift 3 pts but after being at -1 last month.

Spending intentions were little changed m/o/m with 1 pt upticks for vehicles and homes and a 4 pt rise for a major household item.