US Consumers Expect Softened Labour Market, Persistent Inflation

Despite persistence from the Biden administration and the Federal Reserve that the US economy is NOT in a recession, consumers’ inflation expectations and labour market outlook may suggest otherwise.

Source: University of Michigan

The latest University of Michigan consumer sentiment index rose slightly from June’s historic low of 50 to 51.1 in July, but the focal point was respondents’ views on rapidly rising prices, which rose to the highest in 11 years. Respondents now anticipate that inflation will rise 2.9% in the next five to 10 years, and expect costs over the next 12 months to increase 5.2%.

Source: University of Michigan

Almost half of the consumers surveyed said that inflation is causing substantial hardship on their personal finances— such a proportion has not been exceeded since 1951. The gauge of future expectations dipped from 47.5% last month to 47.3%— the lowest since 1980, while the index for current conditions jumped from 53.8 to 58.1— likely due to the decline in the price of gasoline.

“Inflation continued to dominate consumers’ attention, and labor market expectations continued to soften,” said the survey’s director, Joanne Hsu. Indeed, despite Fed Chair Jerome Powell’s fixation on backward-looking data indicating strong job gains over the past several months, it appears that Americans are certainly not echoing the same sentiment.

“Consumers are finding ways to cope by altering their spending patterns as high prices persist,” added Hsu. “Going forward, these behavioural adjustments are likely to grow.” Last month’s CPI data showed that consumers paid a staggering 9.1% more for goods and services, with all categories undergoing substantial and persistent price gains.


Information for this briefing was found via the University of Michigan and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Tariffs Spark New Race for Critical Metals | Rob McEwen

Antimony Resources: The Bald Hill Project

They Laughed at $3,000 Gold, Now We’re Headed for $4,000! | Sean Roosen – Osisko Development Corp.

Recommended

Steadright Begins Preliminary Economic Assessment On TitanBeach Project

Three Miners Trapped Underground At Newmont’s Red Chris Mine

Related News

Canadian Consumer Prices Still Aren’t Cooling as Food, Shelter Inflation Rise

Consumer prices across Canada remained elevated in November, as core inflation fails to cool. Particularly,...

Wednesday, December 21, 2022, 09:41:02 AM

Bank of Canada Stays Put on Interest Rates Despite Surging Inflation

Despite surging inflation for just about anything and everything, an out of control housing market,...

Wednesday, January 26, 2022, 02:47:00 PM

US Consumer Confidence Plummets to Decade-Low Amid Worsening Inflation Fears

US consumer sentiment fell to the lowest in 10 years, as Americans become increasingly concerned...

Saturday, November 13, 2021, 03:08:00 PM

Consumer Prices Soar 7.7% as Inflation Becomes Unhinged

Canadians continue to feel the pain of the eye-watering surge in consumer prices, as May’s...

Wednesday, June 22, 2022, 10:36:00 AM

Bank of Canada Delivers 75 Basis-Point Hike, Vows to Continue Raising Rates as Inflation Becomes Entrenched

What likely is not a surprise to markets anymore, the Bank of Canada raised borrowing...

Wednesday, September 7, 2022, 11:08:37 AM