Since the first quarter of this year, consumer confidence has been declining, reflecting high living costs and high borrowing costs leading to pessimistic views and expectations of personal financial conditions. Although inflation is beginning to cool, wage growth has been minimal, and many Americans have already exhausted their savings during the pandemic.
Data released on Friday showed that the University of Michigan's Consumer Confidence Index in the United States fell to an eight-month low in July due to high prices continuing to affect people's attitudes towards their personal finances.
The final value of the University of Michigan Consumer Confidence Index in July was 66.4, with an expected and preliminary value of 66.4 and 66 respectively, while June was 68.2.
In terms of sub-indexes, the current situation index fell to 62.7, the lowest level since the end of 2022, lower than the July preliminary reading of 64.1. The expected index fell to 68.8, which is the same as the lowest level this year.
As for the market's inflation expectations, the final value of the University of Michigan's one-year inflation expectation in July was 2.9%, the lowest level in four months, with an expected and preliminary value of 2.9% and 2.9% respectively, while June was 3%. The final value of the University of Michigan's five-year inflation expectation in July was 3%, with an expected and preliminary value of 2.9% and 2.9% respectively, while June was 3%.
The Michigan report also showed that the Personal Financial Prospects Index fell to its lowest level since October of last year, and the Durable Goods Purchase Condition Index fell to its lowest level since the end of 2022.
Joanne Hsu, director of the Michigan Consumer Confidence Survey, said in a statement:
The Consumer Confidence Index has risen 33% above its historic low in June 2022, but remains cautious as high prices continue to affect people's attitudes, especially for low-income individuals.
Since the first quarter of this year, consumer confidence has been declining, reflecting high living costs and high borrowing costs leading to pessimistic views and expectations of personal financial conditions. Although inflation is beginning to cool, wage growth has been minimal, and many Americans have already exhausted their savings during the pandemic.
Consumer confidence affects economic growth in the coming months. Pessimistic consumer sentiment will suppress spending levels and thus affect economic recovery, while optimistic consumer sentiment will help the future economy.
Editor/Lambor