Consumer Sentiment Unexpectedly Sinks To 8 Month Low

The Biden campaign’s hopes that a recent slide in inflation might boost voter views of the economy took a hit Friday when the University of Michigan said its barometer of consumer sentiment fell to its lowest level in eight months in early July.

The sentiment index unexpectedly dropped to 66 in July, down from 68.2 at the end of June, according to the preliminary reading of the University of Michigan’s surveys of consumers. Economists had been expecting a slight increase to 68.5.

This is the lowest reading in eight months and a sign that even flagging inflation is not boosting consumer confidence shaken by more than two years of the most rapid price increases in decades.

Joanne Hsu, director of the survey, said that consumers remain “vociferously frustrated at the persistence of high prices.”

“Almost half of consumers spontaneously expressed complaints that high prices are eroding their living standards, matching the all-time high reached two years ago,” Hsu said.

Both the index reflecting views of current economic conditions and the index focused on expectations declined in July.

Interestingly, the presidential debate that has very much captured the attention of the media and the political class does not seem to have weighed on consumer views of the economy.

“With the upcoming election, consumers perceived substantial uncertainty in the trajectory of the economy, though there is little evidence that the first presidential debate altered their economic views,” Hsu said.