The economic vibes are healing 😀

Soft sentiment data is catching up to the more favorable hard data 👍

Consumer sentiment is recovering. (Source: University of Michigan)

Consumer sentiment is improving rapidly.

According to the University of Michigan’s Surveys of Consumers, consumer sentiment in January surged to the highest level since July 2021. This extends the big improvement seen in December.

“Consumer views were supported by confidence that inflation has turned a corner and strengthening income expectations,” survey director Joanne Hsu said on Friday. “Over the last two months, sentiment has climbed a cumulative 29%, the largest two-month increase since 1991 as a recession ended.”

Over the past three years, concerns around inflation have weighed heavily on sentiment. Even as job creation persisted, unemployment fell to historic lows, and spending rose to record levels — all supporting economic growth — the so-called “vibes” have remained gloomy.

More recently, attitudes around inflation have improved considerably.