(Reuters) – U.S. consumer confidence plummeted in January as Americans worry about rising inflation. A survey was conducted on Friday.

According to the University of Michigan, its preliminary index of consumer sentiment fell from 70.6 in December to 68.1 in January.

Reuters polled economists to forecast that the index would fall to 70.0.

The United States has been hit with many headwinds, despite a strong economy. Inflation is the most prominent concern.

The current rate of inflation, which is 7.0% annually, exceeds wage growth by a wide margin. While a few pandemic-sensitive groups have seen their prices rise, the supply chain disruptions and other factors have not stopped them from increasing.

Inflation readings are encouraging expectations that Federal Reserve will raise interest rates starting in March. It seeks to reduce price inflation closer to its flexible goal of 2%.

In the United States, nearing maximum employment, the Omicron variant has caused a rise in COVID-19 instances over recent weeks.

Richard Curtin, survey director, stated that although Omicron and Delta versions certainly played a role in this shift downward, they were also responsible for the rise of the inflation rate.

He said that three-quarters (75%) of the country’s consumers ranked inflation as more important than unemployment in January.

After falling into a temporary recession in 2020, the coronavirus epidemic caused by 2020’s pandemic, it is expected that economic growth will continue to grow at its fastest rate in nearly 40 years.