The University of Michigan Consumer Sentiment final number for January came in at 81.2, an increase from the 80.4 preliminary report, but below the December final of 82.5. Today's was slightly above the Investing.com forecast of 81.0. The index is off its 85.1 interim high in July of last year.
See the chart below for a long-term perspective on this widely watched indicator. I've highlighted recessions and included real GDP to help evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.
The Michigan average since its inception is 85.1. During non-recessionary years the average is 87.5. The average during the five recessions is 69.3. So the latest sentiment number puts us 11.9 points above the average recession mindset and 6.3 points below the non-recession average.
It's important to understand that this indicator is somewhat volatile with a 3.1 point absolute average monthly change. For a visual sense of the volatility here is a chart with the monthly data and a three-month moving average.
For the sake of comparison here is a chart of the Conference Board's Consumer Confidence Index (monthly update here). The Conference Board Index is the more volatile of the two, but the broad pattern and general trends have been remarkably similar to the Michigan Index.
And finally, the prevailing mood of the Michigan survey is also similar to the mood of small business owners, as captured by the NFIB Business Optimism Index (monthly update here).
The trend in sentiment since the Financial Crisis lows has been one of slow improvement, but it has been more or less range bound over the past two years.