U.S. consumers’ outlook fell this month to its lowest point since July, according to preliminary results of the February University of Michigan consumer sentiment index report.

The index fell for the second consecutive month across all five index components, led by a 12% drop in buying conditions for durable goods, including vehicles. 

The 5% month-over-month decline was “in part due to a perception that it may be too late to avoid the negative impact of tariff policy,” said index surveys director Joanne Hsu in a report on the findings of consumer surveys, which concluded for the latest reading on Feb. 4.

Consumer outlook around personal finances fell 6% to its lowest value since October 2023, according to the index. 

“Many consumers appear worried that high inflation will return within the next year,” Hsu reported.

Expectations of inflation for both the year ahead and longer range jumped. The inflation outlook for 2025 increased to the highest point since November 2023 for two straight months of outsized increases. The current index inflation reading of 4.3% far surpasses the range of 2.3% to 3% in the two years before the pandemic. Long-range inflation expectations are at 3.3%, also well above the 2.2% to 2.6% in the two prepandemic years.

Consumer sentiment was down across the political spectrum and all age and wealth segments, the index surveys found.

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