2023-10-13 15:16:09
Consumers in the United States are worried regarding the rebound in inflation, and the index measuring their confidence deteriorates more than expected in October, according to the preliminary estimate published Friday by the University of Michigan.
The index fell to 63.0 points from 68.1 points in September. The drop is stronger than expected, since analysts saw the index settling at 67.4 points, according to the Market Watch consensus.
“Almost all demographic groups recorded a drop in confidence, reflecting the persistent weight of high prices,” commented the director of the survey, Joanne Hsu, quoted in a press release.
She thus reported “a substantial increase in concerns regarding inflation”, but also a sharp deterioration in expectations regarding economic conditions over the coming year.
“However, expected long-term economic conditions have changed little, suggesting that consumers believe the current deterioration in economic conditions will not persist,” she said.
Thus, the subindex measuring consumer expectations fell by 8.0% compared to last month, falling to 60.7 points. This nevertheless remains 8.0% higher than in October 2022.
The sub-index measuring current conditions also plunges, but to a lesser extent, falling 6.6% compared to September, to 66.7 points. It is 1.7% higher than that of October 2022.
“Confidence fell more than expected at the beginning of October, reaching its lowest level since May,” commented Rubeela Farooqi, chief economist for HFE.
“As consumers continue to spend, the confidence figures suggest caution,” she added.
After rebounding during the two summer months due to housing and gasoline, inflation remained stable in September.
The CPI index, published Thursday, stood at 3.7% over one year, higher than expected however.
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