A new survey shows that consumer sentiment in the United States unexpectedly dropped to its lowest level in six months in January. Despite the dip, the University of Michigan’s Surveys of Consumers also found that many Americans were upbeat about tax reform, and that there are signs of persistent strength in personal finances and buying plans.

In a statement, researchers said that preliminary results for January put the Index of Consumer Sentiment at 94.4, down from 95.9 in December. The 1.6% decline surprised Reuters-polled economists, who had predicted a rise to 97.

January’s decline largely resulted from a decrease in consumers’ assessment of the current state of the economy. Indeed, the survey’s Current Economic Conditions Index dropped from a reading of 113.8 in December to 109.2 in January, research showed.

Nonetheless, American consumers appear to expect better days ahead. Recently passed federal tax reform may have helped propel some optimism. In fact, some 34% of respondents spontaneously mentioned recently passed federal tax reform, with 70% of those viewing it favorably. Even so, the Index of Consumer Expectations only ticked up from 84.3 in December to 84.8 in January – but that rise could accelerate as the tax picture becomes clearer in the months ahead.

“The disconnect between the future outlook assessment and the largely positive view of the tax reform is due to uncertainties about the delayed impact of the tax reforms on the consumers,” said Richard Curtin, chief economist for the University of Michigan surveys. “Some of the uncertainty is related to how much a cut or an increase people, especially high income households who live in high-tax states, face.”

In other findings, favorable buying conditions for homes and automobiles remained high, while the income gain households expect to take home this year also increased slightly. About half of all respondents reported improved finances – a reading that matched the 2017 average, which was the best in 17 years. Some economists said that such positive bottom line results, along with other factors, shouldn’t be lost in a decline in overall consumer sentiment, which still remained at a high level.

“Despite an unexpected decline in the preliminary result for January consumer sentiment, the level of consumer optimism remains near cyclical highs,” said Yelena Shulyatyeva, of Bloomberg Economics. “The latest drop, driven by a modest worsening in consumers’ perception of their finances, contradicts the recent pickup in personal income growth, and therefore is more a reflection of consumers’ perception of their financial situation rather that what is actually happening.”