U.S. consumer confidence fell to its lowest level since early May 2011 as persistent concerns about inflation eroded Americans’ views on the economy.
Friday’s data Michigan University Sentiment Index fell to 59.1 from 65.2 in April. This figure was lower than all estimates in the Bloomberg Economists Survey, which sought an average of 64 people.
The current situation gauge fell to 63.6, the lowest level in 13 years, while the futures gauge fell 6.2 points, ending most gains in April.
Consumers expect prices to rise 5.4 percent next year and hit a 40-year high for the third month in a row. He expects prices to rise at an annual rate of 3%, unchanged from April, over the next five to 10 years.
Survey director Jon Soo said in a statement that inflation was on the rise in consumer thinking. “Throughout the survey they referred to inflation, whether the questions were indicative of their own personal financial, economic outlook or buying conditions.”
Hsu said Americans’ awareness of their current financial situation has reached its lowest level since 2013, compared to a year ago. Nearly half of the respondents did not expect their income to be equal to inflation in the next 12 months.
Consumer prices rose 8.3% in April from a year earlier, according to government data earlier this week – a slight slowdown compared to the previous month, but one of the sharpest gains in decades. Friday’s report shows that purchases of durable goods such as home appliances have fallen to the lowest level since the university began asking questions in 1978.
Meanwhile, gasoline prices have hit new highs in recent weeks and lending costs for home and student loans have risen as the Federal Reserve raises interest rates to control price pressure. This has had an impact on stocks trading close to year-on-year lows.
Still, Americans benefit from a stronger labor market because wages are higher than record job opportunities. Despite significant price pressures, consumer spending has so far been resilient.
-With the help of Vince Gower.