Consumer Sentiment Rose 11.2% to 71.6 in July

Ann Arbor, MI, August 11, 2023-Consumer sentiment rose 11.2% to 71.6 in July, according to final results from the University of Michigan Survey of Consumers. 

This represents a 39% increase year over year. 

“Consumer sentiment rose for the second straight month, soaring 11% above June and reaching its most favorable reading since October 2021,” says Survey of Consumers director Joanne Hsu. “All components of the index improved considerably, led by a 18% surge in long-term business conditions and 14% increase in short-run business conditions. Overall, the sharp rise in sentiment was largely attributable to the continued slowdown in inflation along with stability in labor markets. However, sentiment for lower-income consumers fell. This group anticipates that inflation and their income prospects will both worsen in the year ahead, highlighting the heterogeneity of views across the population. 

“Year-ahead inflation expectations were little changed, inching up from 3.3% in June to 3.4% in July. The current reading is well below the high point of 5.4% from April 2022 but remains above the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations were unchanged from June at 3.0%, again staying within the narrow 2.9-3.1% range for 23 of the last 24 months.”