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U.S. Consumer Sentiment at Two-Year High

Buying conditions for durable goods jumped to the highest level in two years, as most consumers expect their incomes to rise at least as much as inflation.

By Reade Pickert | July 14, 2023 at 12:36 PM
Photo: Shoppers carry bags in San Francisco on September 29, 2022. Shoppers carry bags in San Francisco on September 29, 2022.

U.S. consumer sentiment soared in early July to an almost two-year high, bolstered by easing inflation and a strong labor market. The University of Michigan preliminary index rose by 8.2 points to 72.6, the highest since September 2021. The reading topped all forecasts in a Bloomberg survey of economists, and the monthly advance was the largest since 2006.

Meanwhile, short-term inflation expectations ticked higher in early July, to 3.4 percent from 3.3 percent a month earlier. That’s still well below last year’s peak of 5.4 percent. Consumers expect costs to rise 3.1 percent on an annual basis over the next 5 to 10 years.

“The sharp rise in sentiment was largely attributable to the continued slowdown in inflation along with stability in labor markets,” Joanne Hsu, director of the survey, said in a statement.

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