- - Consumer sentiment shows 'substantial decline' from last year amid higher prices, tough job market

Emma OckermanDecember 20, 2025 at 12:06 AM

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Americans are heading into the holidays feeling worse about jobs and inflation than they did this time last year, with consumer sentiment hovering near record lows.

Though the University of Michigan’s final reading of consumer sentiment for December showed a modest improvement of 1.9 points from November, the overall index remains 28.5% lower than it was a year ago at 52.9. Last December, the reading was at 74.

"This is a very, very substantial decline over a relatively short period of time," Joanne Hsu, the director of the survey of consumers, said in a Yahoo Finance video appearance Friday. "Consumers are loud and clear that they believe that the outlook for the economy has soured quite a bit since the beginning of the year."

The majority of consumers, for example, expect unemployment to rise in the year ahead. Data published this week showed the country’s jobless rate hit a four-year high of 4.6% in November.

Learn more: Jobs, inflation, and the Fed: How they're all related

Meanwhile, the survey’s gauge for economic conditions dropped to 50.4, down nearly 33% from a year ago. Still, consumer expectations improved in December compared to November.

“By and large, consumers, even though they think we're a little bit better off than November, they still think we are much worse off than we were at the beginning of the year,” Hsu said.

As for inflation, consumers expect price growth to reach a rate of 4.2% in the year ahead — the lowest reading in 11 months, the University of Michigan said. But it’s well above the level of 3.3% seen in January.

Inflation data for November, also released this week, appeared to be skewed by the government shutdown but showed that price growth cooled on an annual basis.

Related: What is inflation, and how does it affect you?

Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at [email protected].

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Source: “AOL Money”