U.S. consumers are kicking off the new year in a downbeat mood as inflation expectations jumped.

The University of Michigan’s consumer sentiment index ticked down to a reading of 73.2 in the first few weeks of January, according to preliminary results released Friday. Economists were projecting the index to fall to 73.3 from December’s 74 reading.

Inflation expectations for the year ahead jumped to 3.3% in January from 2.8% in December. This is the highest reading since May 2024, said Joanne Hsu, director of consumer surveys at the University of Michigan.

Long-run inflation expectations also rose to 3.3% from 3% in December. Consumers across various demographic groups exhibited this increase in concern over rising prices, Hsu said, with particularly strong surges from lower-income households and people who lean Independent.

“January’s divergence in views of the present and the future reflects easing concerns over the current cost of living this month, but surging worries over the future path of inflation,” Hsu said.