July 2023: Consumer Sentiment Hits $72.6, Highest Since 2021 Amid Inflation Optimism
In July 2023, U.S. consumer confidence reached a 22-month peak driven by easing inflation and a robust job market, reveals the University of Michigan's latest Consumer Sentiment Index.
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Highlights to Know
- July 2023 saw the University of Michigan’s Consumer Sentiment Index climb to 72.6, marking the highest point since September 2021.
- Consumer optimism is fueled by slowing inflation rates and a strong labor market.
- Despite positive sentiment, expectations for inflation slightly increased in both short- and long-term outlooks.
U.S. consumer confidence surged in July 2023, reaching levels not seen since late 2021, as inflation pressures eased and employment remained strong, according to the University of Michigan’s survey.
The preliminary July Consumer Sentiment Index rose 12.7% from June, hitting 72.6. The current economic conditions index increased by 12.3% to 77.5, while the consumer expectations index jumped 12.8% to 69.4.
Joanne Hsu, director of the University’s consumer survey, attributes this rise largely to continued inflation deceleration and labor market stability.
Hsu highlighted that the index now sits midway between the historic low of 50 in June 2022 and the pre-pandemic high of 101 in February 2020.
Survey respondents predict annual inflation to be 3.4% in one year, a slight increase from 3.3% in June. The five-year inflation expectation also edged up to 3.1% from 3.0%.
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