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  • U.S. consumer sentiment soars in July to highest level since September 2021

    U.S. consumer sentiment soars in July to highest level since September 2021

    The numbers: The University of Michigan’s gauge of consumer sentiment rose to a preliminary July reading of 72.6 from a June reading of 64.4. It is the largest gain since December 2005. Sentiment is at its highest level since September 2021.

    Economists polled by the Wall Street Journal had expected a June reading of 65.5.

    However, Americans’ expectations for overall inflation over the next year rose to 3.4% in July from 3.3% in the prior month. Expectations for inflation over the next 5 years ticked up to 3.1% from 3% in June.

    Key details: According to the UMich report, a gauge of consumers’ views on current conditions jumped to 77.5 in July from 69 in the prior month, while a barometer of their expectations rose to 69.4 from 61.5.

    Big picture: Sentiment is improving as gasoline prices have held steady this summer. Low unemployment is also playing a role.

    What are they saying? “The good news is that sentiment has roughly retraced half of its fall from pre-pandemic levels. For most Americans, a modest gain in income is expected. Still, durable goods buying conditions remain far off their recent levels. The rise in confidence seems restrained, and clouds concern about the forecasted economic downturn which continues to linger,” said Scott Murray, economist at Nationwide, in a note to clients.

    Market reaction: Stocks
    DJIA,
    +0.33%

    SPX,
    +0.10%
    opened higher on Friday while the yield on the 10-year Treasury note
    TMUBMUSD10Y,
    3.805%
    rose to 3.81%.

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  • U.S. consumer sentiment strengthens in final January reading

    U.S. consumer sentiment strengthens in final January reading

    The numbers: U.S. consumer sentiment improved in late January to 64.9, according to the University of Michigan’s gauge of consumer attitudes.

    This added 5.2 index points from 59.7 in December and was up from the initial January reading of 64.6.

    Economists surveyed by The Wall Street Journal had forecast an unchanged reading of 64.6.

    Key details: A  gauge of consumer’s views of current conditions rose to a final reading of 68.4 in January from 59.4 in the prior month.

    The indicator of expectations for the next six months rose to 62.7 from 59.9 in December.

    Americans viewed that inflation was moderating in January. They expected the inflation rate in the next year to average about 3.9%, down from 4.4% in December. This is the lowest level since April 2021.

    In the longer run, inflation expectations held steady at 2.9%.

    Big picture: Consumer confidence rose for the second straight month on lower energy prices and better financial market conditions. Assessments of personal finances are improving, supported by higher income and easing price pressures.

    But sentiment remains well below the pre-pandemic level of 101 hit in February 2020 and the more recent high of 88.3 hit in April 2021.

    Market reaction: Stocks
    DJIA,
    -0.20%

    SPX,
    -0.17%
    opened higher on Friday. The yield on the 10-year Treasury note
    TMUBMUSD10Y,
    3.534%
    rose to 3.54%.

    Source link