The consumer price index remained unchanged for the month of July as the energy index fell 4.6%, setting the consumer price index at 8.5% over the past 12 months.
The food index rose 1.1% while the food at home index rose 1.3%, causing average Americans to be more cost-conscious when it comes to feeding their families.
What Happened: On Friday, the University of Michigan Surveys of Consumers released the preliminary results for the consumer sentiment index for August 2022.
According to the survey, the consumer sentiment index for August was 55.1, an increase of 7% since July, and up from the all-time low reached in June. The consumer sentiment index is still down 21.6% year-over-year as inflation and two consecutive quarters of declining GDP sparked concerns in the economic outlook for the U.S.
Furthermore, the consumer expectations index for August was 54.9, an increase of 16.1% from July, up from lows not seen since the 1980s.
Current Economic Conditions: The current economic conditions index decreased to 55.5 or 4.5% since July, and declined 29.3% year-over-year.
Surveys of Consumers Director Joanne Hsu stated in the survey, “With continued declines in energy prices, the median expected year-ahead inflation rate fell to 5.0%, its lowest reading since February but still well above the 4.6% reading from a year ago.”
Although the gasoline index for July fell 7.7%, consumers still saw a rise in inflation for food eating away at their personal finances and purchasing power.
Inflation Forecasts: As 48% of consumers blame inflation for eroding their living standards, it is evident that a decline in inflation sent positive sentiment to the markets and economy, although it is uncertain if inflation has peaked.
The survey reported uncertainty in long-term inflation has receded, while the median long-term inflation expectations remained within the 2.9% to 3.1% range seen over the past year.
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