UM Consumer Sentiment Index rises to 51.5 in July

By Xu Jing

CHICAGO, July 29 (Xinhua) -- The Consumer Sentiment Index released Friday by the University of Michigan (UM) Surveys of Consumers rose to 51.5 in the July 2022 survey, up from 50 in June but below last July's 81.2.

The Expectations Index rose to 58.1, up from 53.8 in June and below last July's 84.5; The Current Conditions Index fell to 47.3, down from 47.5 in June and below last July's 79.

Most components of the index were little changed, though buying conditions for durables adjusted upwards, primarily due to perceptions of easing supply constraints. But buying conditions for durables remained 28 percent lower than July 2021, according to UM economist Joanne Hsu, director of the surveys.

Consumers' views on their personal finances, which remained extremely negative at 35 percent below a year ago, continued to be dominated by concerns over rising prices. And 49 percent of all households surveyed cited inflation as the main factor for declining living standards over the past year, a figure that was exceeded only once before in 1951. Meanwhile, an increasing share of consumers reported coping by reducing their spending.

With gas prices easing over the last month, the share of consumers mentioning gas during their interviews dropped to 46 percent, compared with 50 percent in June and 15 percent in January 2022. Consumers now expect gas prices to rise a median of less than one cent both over the next year as well as the next five years, suggesting that they may believe gas prices have crested.

Over half of consumers expected their incomes to grow over the next year, with anticipated wage gains remaining at the same 1.1-percent rate from June. Consumers under age 45 continued to be more upbeat than older consumers, expecting a one-year gain in income of 4.5 percent. However, only 17 percent of consumers expected their income growth to exceed inflation.

Generally, consumers expressed even less confidence in labor markets: unemployment expectations worsened by 14 percent from June and 44 percent from a year ago, reaching its lowest reading since 2011.

The Surveys of Consumers is a rotating panel survey based on a nationally representative sample that gives each household in the coterminous United States an equal probability of being selected. Interviews are conducted throughout the month by telephone.

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