The preliminary index for the university’s Surveys of Consumers rose to 51.1 in July from the record low of 50 posted in June.
“The share of consumers blaming inflation for eroding their living standards continued its rise to 49%, matching the all-time high reached during the Great Recession,” said Joanne Hsu, Surveys of Consumers director, in a statement. “These negative views endured in the face of the recent moderation in gas prices at the pump.“
The survey also showed that expectations for long-term inflation continue to improve. Median expectations for inflation levels five years from now dropped to 2.8%, which lands below the range of 2.9% to 3.1% seen during the past 11 months.
The consumer sentiment data follows the release of new retail sales figures, which showed a slight pullback in spending as Americans battle high prices on everything from cookies to clothing. Economists and policymakers are closely watching for any substantial dip in US consumer spending, which drives almost two-thirds of the economy.
Retail sales grew 1% in June from May to $680.6 billion and were up 8.4% from June 2021, according to data released earlier Friday by the US Census Bureau.
However, since retail sales figures are not adjusted for inflation, the higher number likely reflects higher prices as opposed to more spending. Inflation, as measured by the Consumer Price Index,
The survey results are part of an economic data set that is carefully monitored by the Federal Reserve, which is in the throes of trying to rein in the highest inflation in 40 years.
While some analysts and economists previously expected the Fed to raise its benchmark rate by 75 basis points when it meets at the end of the month to discuss monetary policy, a recent slew of robust economic data has markets preparing for more aggressive action from the Fed — including a potential rate hike of 100 basis points — to cool consumer demand.
This story is developing and will be updated.
July 15, 2022 at 09:39PM