The University of Michigan’s Consumer Sentiment Index fell to 66.4 in July from 68.2 in June. Economists polled by FactSet Research Systems, the global financial digital platform, had expected the reading to be 66.5. Preliminary data released earlier in the month showed the Index falling to 66.
Joanne Hsu, director of surveys at the University of Michigan, stated that the Index has been virtually unchanged in the past three months, with any increases or decreases being statistically insignificant and below the margin of error.
Hsu said, “July’s reading was a statistically insignificant 1.8 index points below June, well under the margin of error. Sentiment has lifted 33 percent above the June 2022 historic low, but it remains guarded as high prices continue to drag down attitudes, particularly for those with lower incomes. Labor market expectations remain relatively stable, providing continued support to consumer spending. However, continued election uncertainty is likely to generate volatility in economic attitudes in the months ahead.
“Year-ahead inflation expectations fell for the second straight month, reaching 2.9 percent. In comparison, these expectations ranged between 2.3 to 3.0 percent in the two years prior to the pandemic. Long-run inflation expectations came in at 3.0 percent, unchanged from last month and remaining remarkably stable over the last three years. These expectations remain somewhat elevated relative to the 2.2-2.6 percent range seen in the two years pre-pandemic.”
The University of Michigan’s Economic Conditions Index totaled 62.7, down 4.9 percent from 65.9 in the previous month and down 18.0 percent from 76.5 a year ago.
The Index of Consumer Expectations Score was 68.8 in July, down 1.1 percent from 69.6 in June and up 0.7 percent from 68.3 in July 2023.
