Consumer confidence picked up more than expected in August in the United States, due to the improving outlook on the inflation front, which relieves low- and middle-income households, according to the preliminary estimate published on Friday. by the University of Michigan.
The index stood at 55.1 points, up 7% from July, and higher than the 52.1 points expected by a consensus of analysts. This index had reached its all-time low in June. This increase is due to the improving outlook, while the perception of current conditions is deteriorating. The indices measuring them stand respectively at 54.9 points (+16.1%) and 55.5 points (-4.5%). “All components of the expectations index have improved this month, especially among low- and middle-income consumers for whom inflation is particularly important“, Details the director of the investigation Joanne Hsu, quoted in a press release.
A fragile trust
She points out that “the economic outlook for the coming year has increased significantly“. “At the same time, high-income consumers, who generate a disproportionate share of spending, have seen sharp declines in their current personal finances as well as conditions for purchasing durable goods.“, further specifies the economist. Inflation, which in July reached a record level for more than 40 years, slowed in August to 8.5% over one year, raising hopes that the trend will continue. “Lower (petrol) prices at the pump, combined with the eventual spike in annual inflation, should allow confidence to gradually pick up in the coming months“Comments Mahir Rasheed, economist for Oxford Economics, in a press release.
He believes, however, that this confidencewill probably remain fragile until the end of the year“, Due to “uncertainty related to price pressures and the broader economy, which remains high in the near term, in addition to some (expected) slowdown in the labor market“. The measures taken by the US central bank (Fed) to curb inflation will have the effect of slowing economic growth and the job market. However, it remains very dynamic, and in July returned to its pre-pandemic level, in terms of jobs created, and the unemployment rate, which fell to 3.5%.
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