Preliminary data released by the University of Michigan on Friday (9th) showed that consumers’ initial one-year inflation expectations unexpectedly fell to 4.6%, the lowest since September 2021, while gasoline prices fell, boosting consumer sentiment in November. The initial value of consumer confidence rose to 59.1, far exceeding expectations.
According to the data released by the University of Michigan, the initial value of the consumer confidence index in November rose from 56.8 in October to 59.1, far higher than the 56.9 expected by the market, but still lower than the 70.6 in the same period last year, of which the current consumer confidence index in December was 60.2, Higher than market expectations of 58.8; future consumer confidence index was 58.4, higher than expected 54.5.
In terms of inflation expectations, which are closely watched by the market, US consumers’ inflation expectations for the next year unexpectedly fell, from 4.9% in October to 4.6%, the lowest since September 2021. In addition, inflation expectations for the next five years remained stable at 3%, in line with market expectations.
Although US prices remain high, inflation has shown signs of easing in recent months, and the market generally expects that next week’s US consumer price index (CPI) for November will show a further slowdown in inflation.
All components of the Michigan Consumer Confidence Index improved in December, with one-year business conditions surging 14% and long-term business conditions growing moderately 6%. In addition, the report also showed that the median change in consumers’ income expectations rose to a 15-year high, but more than half of respondents said they expected inflation to exceed these increases in the coming year.
Joanne Hsu, director of surveys at the University of Michigan Consumer Confidence Index, said in a statement that consumer concerns about high prices under various circumstances eased last month, although these concerns are still much higher than a year and a half ago, pointing to inflation in the year ahead. The drop in expectations is not just a result of the current drop in gasoline prices.
Joanne Hsu also said that with the continued decline in consumer purchasing power, rapid growth in credit card and auto loan balances, and concerns about continued high borrowing costs, the momentum of personal spending this year may not be sustainable.