According to the University of Michigan Consumer Sentiment Survey, the January Index fell 4.8 percent from the previous month. Consumer sentiment has followed a COVID roller coaster with a steep decline from February through April 2020 following the emergence of the pandemic with  shutdown of the economy.  There was a strong recovery from November 2020 through April 2021 coincident with control measures and the introduction of COVID vaccination.  The emergence of the Omicron variant has depressed consumer sentiment with a 24 percent decline in the Index over the past three months.

Inflation and erosion of real income has contributed to disillusionment with the U.S. economy and there is growing concern over the ability of the Federal Reserve to curb prices of fuel, food, rents and household essentials.  Consumers are extremely aware of uncertainties relating to COVID and geopolitical risks according to Richard Curtain, Chief Economist for Consumer Surveys at the University of Michigan.