US consumers’ near-term inflation expectation lowest since 2020
Households’ one-year inflation expectation stood at 2.8 per cent, down from 2.9 per cent in July and now the lowest since December 2020
US consumers see inflation continuing to moderate in the next year, with a gauge of price growth expectations published on Friday at the lowest level in August since late 2020.
The University of Michigan’s monthly consumer sentiment index survey showed households’ one-year inflation expectation at 2.8 per cent, down from 2.9 per cent in July and now the lowest since December 2020. The five-year outlook for price growth was unchanged at 3 per cent.
The wider survey showed a modest improvement in consumer sentiment this month, with the uptick having significant political overtones as the November 5 US presidential election approaches.
The overall sentiment index edged up to 67.9 in August from July’s eight-month low of 66.4, snapping a four-month slide.
The increase largely came from self-described political independents, Joanne Hsu, the director of the University of Michigan’s Surveys of Consumers, said in a statement.
“Sentiment this month reflects a slight rise in sentiment among independents, as Democrats and Republicans offset each other almost perfectly,” Hsu said.