06-16-2023 11:26
Short-term inflation expectations for the United States fell to a more than two-year low in early June, helping boost consumer confidence. Specialists determined that Americans expect prices to rise at an annual rate of 3.3% over the next year, below the 4.2% projected in May, according to the preliminary reading for June from the University of Michigan.
He confidence index rose to a four-month high of 63.9%, also helped by the deal to resolve the debt ceiling crisis, the report showed on Friday. The median estimate in a Bloomberg survey of economists pointed to a reading of 60%.
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Despite the boost in confidence, Americans became more concerned about their income, the report showed. The labor market, which has long supported strong consumer spending, has more balanced in recent months, meaning that workers no longer see the solid wage gains of recent years.
“Confidence is now 28% above the record low of a year ago and may be resuming its upward trajectory since,” Joanne Hsu, the survey’s director, said in a statement. “However, as it stands, sentiment remains low by historical standards as earnings expectations have softened.”
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Concern for the labor market
The report indicated more concern among consumers about the job market. The drop in near-term inflation expectations were visible across all age, income and education groups, according to the university. They forecast costs to rise 3% over the next five to 10 years, compared with 3.1% last month.
The measure of current conditions rose to 68 from 64.9 percent, while the measure of expected conditions advanced to a four-month high of 61.3 percent.
A gauge of purchasing conditions for durable goods rose this month to the highest level since August 2021. Consumer perceptions of their current financial situation were the weakest this year.
