US Consumer Sentiment Rises to Five-Month High
US consumer sentiment rose in early July to its highest level in five months. This increase was driven by falling gasoline prices, which helped ease pressure on household budgets.
The University of Michigan's consumer sentiment index rose to 54.4 in July, from 49.5 in June. This figure exceeded all economists' forecasts in a Bloomberg survey.
The decline in gasoline prices from June to early July was a major factor in improving consumer confidence. However, the inflation outlook has again become a concern after conflicts in the Middle East began pushing energy prices up again.
In the survey, consumers expected prices to rise 4.2% over the next year, down from 4.6% in June. Meanwhile, long-term inflation expectations for the next five to ten years remained at 3.3%.
Despite the improved sentiment, consumers remain concerned that inflationary pressures could rise again. Some consumers even believe it is better to buy durable goods now before prices rise in the future.
This data, in turn, suggests that US consumption remains resilient, but inflation risks have not completely subsided. If energy prices rise again due to the Middle East conflict, the market could potentially reassess the direction of the Fed's policy and the movement of the US dollar. (arl)
Source: Newsmaker.id
