#USConsumerConfidence In January 2025, the University of Michigan's Consumer Sentiment Index experienced its first decline in six months, dropping to 71.1 from December's 74.0. This decrease reflects growing consumer concerns about the labor market and potential price increases due to anticipated tariff policies. Notably, 47% of consumers expect higher unemployment in the coming year, marking the highest level of such concern since the pandemic recession. Additionally, one-year inflation expectations rose to 3.3% from December's 2.8%, surpassing the pre-pandemic range of 2.3%-3.0%. These heightened inflation expectations are linked to apprehensions about proposed tariffs by President Donald Trump's administration. The decline in sentiment was broad-based, affecting various income, wealth, and age groups. Despite reporting stronger incomes, consumers remain cautious about the economic outlook, indicating a need for close monitoring of policy developments and their potential impact on consumer confidence.