Consumer sentiment inched up a scant 1.9 index points from November, according to the University of Michigan Surveys of Consumers.
Buying conditions for durable goods fell for the fifth straight month, whereas expectations for personal finances and business conditions rose. The outlook for labor markets lifted a bit this month, though a solid majority of consumers expect unemployment to continue rising during the next year.
Despite these improvements, sentiment remains nearly 30% below December 2024, in large part due to continued concerns about pocketbook issues, particularly the strain of high prices and the prospect of further weakening of labor markets, said U-M economist Joanne Hsu, director of the surveys.
Dissatisfaction over high prices continues
About 47% of consumers spontaneously mentioned that high prices are weighing down their personal finances, unchanged from November and well above the 35% seen a year ago. High prices as well as the impact of tariffs continue to be top issues for consumers when it comes to major purchases.
Buying conditions for durable goods worsened 6% from November and are more than 40% below conditions from a year ago. For vehicles, buying conditions remain at historically low levels and are little changed from last month. For both types of purchases, consumers cited prices and tariffs as negative factors.
"The escalation of tariffs in this past spring spurred fears of catastrophic inflation among consumers," Hsu said. "While those fears abated as tariff policy have since eased, consumers are still expecting inflation to remain elevated for the foreseeable future, thus diluting the potential purchasing power of their budgets."
Labor market expectations remain weak
Throughout 2025, consumers have anticipated that a deterioration in labor markets loomed ahead. This month, about 63% of consumers expected unemployment to worsen in the year ahead, up from 40% a year ago.
"This month's rise in the unemployment rate would likely come as no surprise to consumers; moreover, they expect there may be further increases on the horizon," Hsu said.
Income expectations were little changed from last month at relatively subdued readings. While consumers' expectations of personal job loss improved a touch since November, they remain much higher than last December.
Consumer Sentiment Index
The Consumer Sentiment Index rose to 52.9 in the December 2025 survey, up from 51.0 in November and below last December's 74.0. The Current Index fell to 50.4, down from 51.1 in November and below last December's 75.1. The Expectations Index rose to 54.6, up from 51.0 in November and below last December's 73.3.
About the surveys
The Surveys of Consumers is a rotating panel survey at the University of Michigan Institute for Social Research. It is based on a nationally representative sample that gives each household in the coterminous U.S. an equal probability of being selected. Interviews are conducted throughout the month by web. The minimum monthly change required for significance at the 95% level in the Sentiment Index is 4.8 points; for the Current Economic Conditions Index and Index of Consumer Expectations, the minimum is 6 points.
About ISR
Established in 1949, the Institute for Social Research at the University of Michigan is among the world's oldest social science research organizations and a world leader in the development and application of social science methodology. ISR conducts some of the most widely cited surveys and studies in the nation, including the University of Michigan Surveys of Consumers, American National Election Studies, Monitoring the Future Study, Panel Study of Income Dynamics, Health and Retirement Study, National Survey of Black Americans and World Values Survey. ISR is also home to the Inter-University Consortium for Political and Social Research, which maintains the world's largest computerized social science data archive.
