University of Michigan Final Consumer Sentiment Index for July 2022 Remains Near Its Historic Low

The University of Michigan today (7-29-22) released its final Consumer Sentiment Index (CSI) for July. The Index of Consumer Sentiment increased to a reading of 51.5 in July, up from its 50.0 reading in June. This is a month-over-month increase of 3.0% but down 36.6% year-over-year (81.2 in July 2021).

The Current Economic Conditions increased to a reading of 58.1 in July, up from its 53.8 reading in June. This is a month-over-month increase of 8.0% but down 31.2% year-over-year (84.5 in July 2021).

Finally, the Index of Consumer Expectations declined slightly to a reading of 47.3 in July, down from its reading of 47.5 in June. This is a month-over-month decrease of 0.4 and down 40.1% year-over-year (79.0 in July 2021).

In remarks and analysis prepared to accompany the release of the final July CSI, Joanne Hsu, Director of Surveys for the University of Michigan, said:

“The final July reading showed little change in consumer sentiment from its historic low in June. The one-year economic outlook fell to its lowest reading since 2009. At the same time, concerns over global factors have eased somewhat. This easing provided some limited support to buying conditions for durables, which remained near the all-time low reached last month, as well as a modest retreat in long run inflation expectations.

However, inflation continued to dominate consumers’ attention, and labor market expectations continued to soften. This month’s Sentiment Index was the second lowest reading on record, and the Q2 slowdown in personal consumption expenditures was no surprise. The final July reading of the median expected year-ahead inflation rate was 5.2%, little changed from mid-month or the preceding two months. Long run expectations came in at 2.9%, remaining within the 2.9-3.1% range seen in the past 11 months.”