Keeping you up to date on the latest data releases.
Preliminary numbers show that The University of Michigan’s Index of Consumer Sentiment dipped to 83.9 in early July from 84.1 in June. This is the second consecutive month of declines. Survey respondents viewed current economic conditions better than last month: That sub-index rose from 93.8 to 99.7, the highest reading since July 2007. The proximate cause for the index of consumer expectations decline among high income households, as well as the falloff in the future economic prospects was a surge in the number of households that expect higher interest rates during the year ahead. Consumers are anticipating interest rate increase to slow the pace of economic growth and dim prospects for employment. For the first time since 2004, more households are looking towards low interest rates rather than low prices when asked about buying attractive conditions for homes and vehicles. Finally, buying attitudes toward household durables improved this month to 147 from 143 in June.
As for inflation expectations in early July, consumers expect a year-ahead inflation rate of 3.3 percent and a longer-term (five- to ten-year) rate of 2.9 percent.