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U.S. consumer sentiment drops in early July on inflation fears

Economic IndicatorsJul 16, 2021 05:05PM ET
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© Reuters. FILE PHOTO: A man shops, during the coronavirus disease (COVID-19) pandemic, on 5th Avenue in New York, U.S., February 17, 2021. REUTERS/Brendan McDermid

By Evan Sully

(Reuters) -U.S. consumer sentiment fell sharply and unexpectedly in early July to the lowest level in five months as inflation worries dented confidence in the economic recovery, a survey showed on Friday.

The University of Michigan said its preliminary consumer sentiment index fell to 80.8 in the first half of this month - the lowest since February - from a final reading of 85.5 in June. Economists polled by Reuters had forecast the index would rise to 86.5.

"Consumers' complaints about rising prices on homes, vehicles, and household durables has reached an all-time record," Richard Curtin, the survey director, said in a statement.

Supply constraints nationwide have led to a surge in consumer prices, as they increased by the most in 13 years in June.

The survey's gauge of current economic conditions also fell to a reading of 84.5, the lowest since August 2020, from 88.6 in June. Its measure of consumer expectations slid to 78.4, the lowest since February, from 83.5.

The survey's one-year inflation expectation shot to the highest level since August 2008 at 4.8%, up from 4.2%, while its five-year inflation outlook ticked up to 2.9% from 2.8% in June.

"Inflation has put added pressure on living standards, especially on lower and middle income households, and caused postponement of large discretionary purchases, especially among upper income households," Curtin said.

U.S. consumer sentiment drops in early July on inflation fears
 

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Comments (3)
Investing Man
Investing Man Jul 17, 2021 11:32AM ET
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Trumps tarrifs we pay for never went away. Thats the part they leave out.
charles ck
charles ck Jul 16, 2021 11:24PM ET
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If by "inflation fears" you mean "democrat/Biden incompetence fears", you are correct...
MK MK
MK MK Jul 16, 2021 12:00PM ET
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Inflation is temporary or transitory, do not worry silly yankees. Powell keeps it under control
Andrew Allen
Andrew Allen Jul 16, 2021 12:00PM ET
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inflation is constant for nearly 100 years read a book. Rate of inflation is ALWAYS transitory. Whether it transitions higher or lower is the question. Inflation has beaten monthly estimates for half a year straight. Please stop carrying water for these corrupt crooks
Franco Dominguez
Franco Dominguez Jul 16, 2021 12:00PM ET
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this inflation is not transitory, transitory when you havent shortage, usa has shoetarge even from working people. Transitory is when you hv everything before pendemic
 
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