Consumer sentiment brightens, defying economists' expectations

Grocery Store Shopping Supermarket (Oscar Wong/Getty Images)
By Max Zahn, ABC News

(NEW YORK) -- Consumer sentiment ticked higher in February for the second consecutive month as inflation fears appeared to ease, though shopper attitudes remained well below levels registered a year ago, University of Michigan data on Friday showed. The reading exceeded economists' expectations

At its low point in November, consumer sentiment fell close to its worst level since a pandemic-era bout of acute inflation. Modest gains in recent months indicate some positive momentum for shoppers.
Year-ahead inflation expectations dropped from 4% in January to 3.5% in February, the data showed. The outcome anticipated by respondents would put inflation above its current level of 2.7%.

The labor market has slowed in recent months, while inflation has hovered above the Federal Reserve's target rate of 2%.

Despite these challenges, some major economic indicators remain upbeat.

In the fall, shoppers helped propel the fastest quarterly U.S. economic growth in two years, federal government data in December showed.

Meanwhile, a relatively small fraction of American adults are unemployed and looking for work. The unemployment rate dropped to 4.4% in December from 4.6% in November, the U.S. Bureau of Labor Statistics said, putting unemployment at a low level by historical standards.

Turmoil in markets this week, however, has prompted concern among some observers about the financial outlook.

Some major tech stocks plummeted in recent days after Anthropic unveiled an artificial intelligence tool viewed by some investors as a potential replacement for widely-used software products.

The price of bitcoin plunged more than 10% on Thursday, sinking the world's largest cryptocurrency to its lowest level since October 2024 and erasing sizable gains made since then.

Geopolitical conflict also looms amid negotiations over Greenland, U.S.-backed leadership in Venezuela, the ongoing war between Russia and Ukraine, as well as persistent tensions between the U.S. and Iran.
In recent weeks, Trump has threatened tariffs against Canada, South Korea and eight European countries, invoking the tool as means of exerting pressure over a range of foreign-policy issues.

Copyright © 2026, ABC Audio. All rights reserved.

On AirBusiness 860 - Bloomberg News Logo
    844-470-5277

    More from 86KONO

    More From The Big 86

    86KONO Photos