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The numbers: The University of Michigan said the preliminary reading of its U.S. consumer sentiment index in January was 99.1, down slightly from 99.3 in the prior month.
Economists polled by MarketWatch expected a reading of 99.6.
The sentiment indicator covers how consumers view their personal finances as well as business and buying conditions.
The big picture: The healthy job market and rising stock market are bolstering consumer confidence.
What are they saying? “The headline figure was near consensus at 99.1, basically flat from last month’s 99.3,” said Jon Hill, a strategist at BMO, in an email.
“In a welcome development for the Fed, inflation expectations at both the 1-year, and 5- to 10-years forward windows ticked higher to 2.5%,” he added.
A decline in inflation expectations would trouble the Federal Reserve, because it would suggest consumers expect subdued growth ahead.
Market reaction: U.S. stocks SPX, +0.22% DJIA, +0.17% were up modestly and hitting record intraday highs on Friday, after the main indexes closed at new records on Thursday.
