The University of Michigan's preliminary consumer sentiment index for January 2026 shows a slight increase to 54.0, marking the highest level since September 2025. Despite this rise, the index remains approximately 25% lower year-on-year. The improvement is primarily attributed to increased confidence among low-income groups, while sentiment among high-income groups has weakened. Consumers continue to be affected by high prices and a slowdown in employment growth. Inflation expectations remain a concern, with the one-year inflation outlook steady at 4.2%, and the long-term inflation expectation edging up to 3.4%.