The University of Michigan today (Friday 7-16-21) released its preliminary Consumer Sentiment Index (CSI) for July. Concerns about rising prices has led to a sharp drop in buying conditions for ‘big-ticket’ items and resulted in the decline. The CSI fell to a five-month low to a reading of 80.8 from 85.5 in June. Consumers expect inflation to rise 4.8% over the next year, the highest since August 2008. At the same time, they were more sanguine about longer-term prospects for prices. The expected inflation rate over the next five to 10 years crept up to 2.9% from 2.8% last month.
In a statement prepared for the preliminary release of the July CSI, Richard Curtain. Director of Surveys for the UofM said, “Inflation has put added pressure on living standards, especially on lower- and middle-income households, and caused postponement of large discretionary purchases, especially among upper income households. Consumers’ complaints about rising prices on homes, vehicles and household durables” reached an all-time record, Curtin said.
The university’s measure of buying plans for durables fell to 101 in early July, the lowest since April 2020 during the height of the pandemic. Buying attitudes for vehicles and homes shrank to their lowest point since 1982, the report showed. Just 30% of all consumers cited favorable home-buying conditions, the lowest level since September 1982. The gauge of current conditions dropped to 84.5 in July, the lowest since August, from 88.6. The university’s measure of expectations decreased to a five-month low of 78.4 from 83.5.
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U.S. consumer sentiment down, University of Michigan index shows