While most economic indicators have been pointing upward for months now, it’s not all smooth sailing out there, as US consumers try to regain the elusive “normal” we’ve been talking about for almost a year and a half. Some of them are telling pollsters they are uneasy looking ahead.
Bloomberg reports U.S. consumer sentiment unexpectedly declined to a five-month low in early July as mounting concerns over rising prices led to a sharp deterioration in buying conditions for big-ticket items.
The University of Michigan’s preliminary sentiment index decreased to 80.8 in July from 85.5 the prior month. That’s according to data released Friday . The figure was lower than all estimates in a Bloomberg survey, which had a median projection of 86.5.
Consumers expect inflation to rise 4.8% over the next year, the highest since August 2008. At the same time, they were more sanguine about longer-term prospects for prices. The expected inflation rate over the next five to 10 years crept up to 2.9% from 2.8% last month.
Richard Curtin, director of the survey, said “Inflation has put added pressure on living standards, especially on lower and middle income households, and caused postponement of large discretionary purchases, especially among upper income households.”
“Consumers’ complaints about rising prices on homes, vehicles and household durables” reached an all-time record, Curtin said. The U of M’s measure of buying plans for durable goods fell to 101 in early July, the lowest since April 2020 during the height of the pandemic.
Buying attitudes for vehicles and homes shrank to their lowest point since 1982, the report showed. Just 30% of all consumers cited favorable home buying conditions, the lowest level since September 1982. Oddly, home sales have continued to boom across the country and right here in SW Michigan, despite those concerns, as we reported last week on June real estate sales figures from the SW Michigan Association of Realtors.
