By PAUL WISEMAN, Associated Press Economics Writer
WASHINGTON (AP) — U.S. consumers’ mood improved slightly this month, with worries about inflation easing a bit, but remains gloomy.
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The University of Michigan’s consumer sentiment index, released Friday in a preliminary version, rose to 53.3 early this month from a final reading of 51 in November. The index beat the 52 mark that economists had forecast but is down considerably from 71.7 in January.
Consumers’ evaluation of current economic conditions slipped slightly, but their expectations for the future brightened somewhat.
Expectations for year-ahead inflation dipped to 4.1% from 4.5% last month to the lowest level since January when Donald Trump returned to the White House and began imposing sweeping taxes — tariffs — on imports from countries around the world. Economists warn that importers pay the tariffs and then try to pass along the cost to their customers through higher prices.
Trump has reached a series of deals with major U.S. trading partners, including the European Union and Japan, that brought his tariffs down from the punishingly high levels he’d threatened in the spring. Still, the average U.S. tariff rate has climbed from 2.4% in January to 16.8% last month, highest since 1935, according to calculations by the Budget Lab at Yale University.
Joanne Hsu, who directs the Michigan economic surveys, said: “The overall tenor of views is broadly somber, as consumers continue to cite the burden of high prices.″
Inflation has fallen from the highs reached in mid-2022 but remains stubbornly above the Federal Reserve’s 2% target.
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