Friday (11th) announced that the University of Michigan’s consumer confidence index in February plummeted to an 11-year low, showing that with soaring inflation, consumer confidence in the future financial prospects also weakened.
The University of Michigan announced that the preliminary reading of US consumer confidence fell to 61.7 in February, far below the 67 expected in a Wall Street Journal survey, and the final reading of 67.2 in January, the lowest since October 2011.
The initial value of the indicator measuring current economic conditions fell to 68.5 from 72 in January, and the initial value of the indicator measuring future expectations fell to 57.4 from 64.1 in January, both hitting new lows in more than 10 years.
After announcing yesterday that the U.S. CPI surged to a 40-year high, 26% of respondents believed that their personal financial prospects would worsen as a result, and nearly two-thirds of respondents expected their financial situation to be weak in the next five years, showing that Consumers are pessimistic regarding purchasing power.
The one-year inflation forecast in the Michigan University survey rose to 5% from 4.9% previously, the highest since July 2008, while the five- to 10-year inflation forecast was steady at 3.1%.
Richard Curtin, chief economist for the University of Michigan’s Consumer Survey, was surprised by the decline in February’s data and said the recent decline in the index was weighed down by a weaker outlook for personal finances, which stemmed from rising consumer inflation, weaker confidence in government policy, and The weakest long-term economic outlook in more than a decade.
