Inflation Expectations Remain High in the US While the Consumer Feeling the Weight
The US consumer has shown resilience during these times, despite surging prices. Although it is starting to show dents as prices continue to grow, but not at the same pace as before. According to statistics released on Friday, consumer sentiment in the United States plummeted to a six-month low in November.
According to data from the University of Michigan’s index, the index has plummeted to 60.4 points so far in November. This is the lowest level of sentiment since May, and it follows October’s final reading of 63.8 points.
Consumers’ expectations for inflation in the coming year increased for the second month in a row to a seven-month high of 4.4%, “indicating that the large increase between September’s 3.2% reading and October’s 4.2% reading was no fluke,” according to Hsu. Meanwhile, consumers forecast inflation to average 3.2% over the next five years, up from 3.0% in October and the most since March 2011.
Preliminary UMich Consumer Sentiment Report for November 2023
- November prelim UMich consumer sentiment 60.4 points vs 63.7 points expected
- October prelim UMich consumer sentiment was 63.8 points
- Current conditions 65.7 points vs 69.5 points expected (70.6 points prior)
- Expectations 56.9 points vs 59.5 expected (66.0 points prior)
- 1-year inflation 4.4% vs 4.2% prior
- 5-10 year 3.2% vs 3.0% prior
This survey is more about gasoline prices and the political mood than anything else. That said, the Fed cares about it and seeing the jump in inflation expectations even as gasoline prices have been sliding is a real concern. The 3.2% longer-term number is also just shy of the 2022 high of 2.3% and has accelerated rapidly from 2.7%.
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