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US consumer sentiment in July remains essentially unchanged from June, when it had reached an all-time low, according to the University of Michigan Surveys of Consumers, which found consumers’ views on their personal finances, which remain extremely negative at 35 per cent below a year ago, continue to be dominated by concerns over rising prices.
Inflation was cited as the main factor for declining living standards over the past year by 49 per cent of all households.
US consumer sentiment in July remains essentially unchanged from June, when it had reached an all-time low, according to the University of Michigan Surveys of Consumers, which found consumers’ views on their personal finances, which remain extremely negative at 35 per cent below a year ago, continue to be dominated by concerns over rising prices.
At the same time, an increasing share of consumers reported coping by reducing their spending, the university said.
Furthermore, with gas prices easing over the last month, the share of consumers mentioning gas during their interviews leveled off to 46 per cent compared with 50 per cent in June and only 15 per cent in January this year.
Consumers now expect gas prices to rise a median of less than one cent both over the next year and as well as the next five years, suggesting that they may believe gas prices have crested.
Buying conditions for durables remained 28 per cent lower this July than the same month last year, according to U-M economist Joanne Hsu, director of the surveys.
The decline in overall gross domestic product in the second quarter came as a little surprise to consumers, who had slowed down their spending.
“Robust consumer spending had been supported by strong labor markets and the expectation of growing incomes, but with persistently high prices eroding those incomes, consumers are adjusting their spending habits to cope,” Hsu said.
“With emerging concerns that rising unemployment could be on the horizon, this pullback in consumer spending is likely to be amplified if their concerns over the future path of the labor market continue to grow,” she added.
The Surveys of Consumers was conducted by the U-M Institute for Social Research.
Fibre2Fashion News Desk (DS)
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