The sentiment among consumers in the United States has surged to its highest level in almost two years, driven by easing inflation and a stable jobs market. According to data from a survey conducted by the University of Michigan, the final reading of the consumer sentiment index jumped to 71.6 in July from 64.4 in June. This reading marks the highest level for a full month since October 2021.
Economists surveyed by The Wall Street Journal had expected the indicator to reach 72.6. The data reveals that both current economic conditions and consumer expectations experienced significant increases.
The improvement in sentiment can be attributed to the ongoing deceleration in inflation and the stability of the labor market, noted Joanne Hsu, the survey director. However, Hsu also pointed out that sentiment declined among lower-income consumers due to concerns about worsening inflation. This indicates the diversity of views across the population.
In terms of inflation expectations for the next five years, a key indicator monitored by Federal Reserve officials, there was no change from June, remaining at 3.0%.