A consumer inside a women’s clothing store within the East Village neighborhood of Des Moines, Iowa, on Saturday, Feb. 5, 2022.
Kathryn Gamble | Bloomberg | Getty Images
A widely followed consumer sentiment survey released Friday showed inflation expectations have eased barely.
The University of Michigan’s Surveys of Consumers said consumers expect inflation to rise at a 5.3% annualized rate as of the top of June. That is down from a preliminary reading released earlier this month, which showed inflation was expected by consumers to extend at a 5.4% clip.
Still, Surveys of Consumers director Joanne Hsu said consumers “also expressed the very best level of uncertainty over long-run inflation since 1991, continuing a pointy increase that began in 2021.”
Federal Reserve Chair Jerome Powell said earlier this moth an uptick in consumer inflation expectations helped sway the central bank to boost rates by 75 basis points, or 0.75 percentage point. That is a much bigger rate hike than many anticipated heading into the announcement.
Meanwhile, overall consumer sentiment fell to a record low, hitting 50. That is 14.4% below a May reading of 58.4 and 41.5% from a year-earlier period.
“Consumers across income, age, education, geographic region, political affiliation, stockholding and homeownership status all posted large declines,” Hsu said.
“About 79% of consumers expected bad times within the yr ahead for business conditions, the very best since 2009. Inflation continued to be of paramount concern to consumers; 47% of consumers blamed inflation for eroding their living standards, only one point shy of the all-time high last reached through the Great Recession,” Hsu added.
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