U.S. JUN Michigan Inflation Expectations Final Actual 4.40, Previous 5.00.

U.S. JUN Michigan Inflation Expectations Final Actual 4.40, Previous 5.00.

The University of Michigan Consumer Sentiment Survey for July 2024 reveals mixed signals regarding inflation expectations in the United States. The year-ahead inflation expectations fell to 2.9%, the lowest since March, from 3% in June [1]. This decrease aligns with the preliminary data and suggests a cooling of inflation fears among consumers. However, the five-year outlook was revised higher to 3%, up from a preliminary estimate of 2.9%, indicating a longer-term inflation concern.

The Michigan Current Conditions Index, measuring current economic conditions, improved to 66.8, beating the forecast of 63.9 and the previous month's reading of 64.8 [2]. This improvement is likely due to the recent boost in retail sales and the relatively stable Consumer Price Index (CPI) and producer prices.

The Michigan Consumer Sentiment Index, which gauges consumer confidence, rose to 61.8, surpassing the forecast of 61.4 and the previous month's reading of 60.7. This positive sentiment is likely driven by the recent economic indicators, including the Michigan Current Conditions Index and the stable inflation expectations.

The Michigan 5-Year Inflation Expectations fell to 3.6%, down from 4.0% in June, indicating a significant decrease in long-term inflation expectations [2]. This shift is notable as it suggests consumers are becoming more optimistic about future inflation levels.

The Michigan 1-Year Inflation Expectations stood at 4.4%, down from 5.0% in June, signaling a cooling of short-term inflation expectations [2]. This decrease is in line with the recent trends in inflation expectations and reflects a more balanced view of inflation in the coming year.

Overall, the University of Michigan Consumer Sentiment Survey for July 2024 indicates a mixed picture regarding inflation expectations. While short-term expectations have cooled, long-term expectations remain relatively stable. The improvement in current economic conditions and consumer sentiment suggests a positive outlook for the U.S. economy.

References:
[1] https://tradingeconomics.com/united-states/michigan-inflation-expectations
[2] https://www.xtb.com/en/market-analysis/breaking-uoms-consumer-sentiment-improves-amid-lower-inflation-expectation