The numbers show that consumers’ confidence in the U.S. economy stayed at an eight-month low in July. This was due to frustration with long-lasting inflation, especially among low-income families that are feeling the pinch the most.
The University of Michigan said Friday that the final reading of the consumer mood index for July was 66.4, up a little from the first reading of 66.0 earlier in the month. The snow level has dropped four months in a row, though, and it’s now the lowest it has been since last winter.
It is also a long way below its all-time high of 101 in February 2020, before the pandemic.
“High prices continue to make people feel bad,” said Joanne Hsu, head of the index. She also said that worry about a rough presidential election “is likely to cause changes in how people feel about the economy in the months to come.”
People in the US believe that inflation will drop to 2.9% in the following year. Based on the consumer price index, the rate of inflation right now is 3%.
Important facts: There were 62.7 responses to a question about what people think about the current state of the economy in July. That’s the fewest people there in 19 months.
At 68.8, the expected score for the next six months was a bit higher.
In the big picture, prices aren’t going up as quickly as they used to, but buyers are still very upset about inflation.
Lower interest rates might help. Because inflation is going down, the Federal Reserve is likely to soon lower the high costs of borrowing money. That would help a lot for people who want to buy a house, a car, or just get a loan.
In the future: Oren Klatchkin, a financial market economist at Nationwide, said, “The most important thing I learned from this report was how different people with high and low incomes feel.” “To sum up, people with higher incomes are generally happy, while people with lower incomes are feeling the heat.”
The Dow Jones Industrial Average (DJIA) went up by 1.64% and the S&P 500 (SPX) went up by 1.11% on Friday, trying to end a recent losing run.
