Latest news with #ConsumerSentiment
Yahoo
3 days ago
- Business
- Yahoo
Consumer sentiment edges up on expectations inflation will cool
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Dive Brief: Consumer sentiment in July edged up to the highest level in five months as pessimism for the short-term business outlook eased and expectations for inflation in a year fell to 4.4% from 5%, the University of Michigan said Friday. At the same time, household expectations for personal finances declined last month and sentiment persists well below both the level in December and the historical average, the university found in a monthly survey. 'Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen, for example if trade policy stabilizes for the foreseeable future,' Joanne Hsu, director of the university's consumer surveys, said in a statement. Dive Insight: Recent stability in consumer sentiment coincides with mixed economic signals, along with widening opinions among Federal Reserve officials on the outlook for jobs and inflation, and whether to cut borrowing costs as soon as this month. Retail sales rose 0.6% in June after a two-month slump. Ten out of 13 retail categories recorded sales gains, including motor vehicles, food and beverages, and building materials, the Census Bureau reported Thursday. Unemployment eased last month to 4.1% from 4.2% in May as U.S. payrolls expanded by 147,000, a healthy clip. Yet state and local government, rather than the private sector, accounted for roughly half of the hiring. Also, the consumer price index increased at a 2.7% annual rate in June compared with 2.4% the prior month, the Bureau of Labor Statistics said Tuesday. Imported goods led the price gains, indicating that tariffs have to a degree fueled inflation. The price for apparel, household furnishings and appliances rose 0.4%, 1% and 1.9%, respectively, the BLS said. Prospects for inflation, employment and economic growth hinge to a big degree on whether tariff-induced inflation eases after a few months or persists into next year. Several Fed officials in recent weeks have warned that import prices may provoke a sustained rise in prices. They have favored holding off on a reduction in the main interest rate until gaining greater clarity on price pressures. 'I see upward pressure on inflation from trade policies, and I expect additional price increases later in the year,' Fed Governor Adriana Kugler said Thursday. 'Given the stability in the employment side of our mandate, with the unemployment rate still at historically low levels, elevated short-run inflation expectations and goods inflation rising due to the upward pressure from tariffs, I find it appropriate to hold our policy rate at the current level for some time,' Kugler said in a speech. Import duties will probably push up inflation by about 1 percentage point during the second half of this year 'and the first part of next year,' New York Fed President John Williams said Wednesday. Holding the federal funds rate at its 'modestly restrictive' level from 4.25% to 4.5% 'is entirely appropriate to achieve our maximum employment and price stability goals,' Williams said in a speech. Fed Governor Christopher Waller disagrees. On Thursday he called on his fellow policymakers to cut the federal funds rate by 0.25 percentage point at their meeting this month. 'Tariffs are a one-off increase in the price level and do not cause inflation beyond a temporary surge,' he said in a speech. Also, 'while the labor market looks fine on the surface, once we account for expected data revisions, private-sector payroll growth is near stall speed and other data suggest that the downside risks to the labor market have increased,' Waller said. 'With inflation near target and the upside risks to inflation limited, we should not wait until the labor market deteriorates before we cut the policy rate,' he said. Over time, the central bank should aim to trim the benchmark rate to 3%, a 'neutral' level that Fed officials believe would neither slow nor spur economic growth, Waller said. Recommended Reading Jobless claims edge up, amplifying Fed signals for rate cut Sign in to access your portfolio
Yahoo
4 days ago
- Business
- Yahoo
Americans are the most optimistic about the economy since just after Trump's inauguration
There's one survey to rule them all, when it comes to getting a gut feeling for the health of the American consumer. Running monthly since 1946, the University of Michigan's consumer sentiment survey offers an uninterrupted, long-term record of American consumers' mood across wars, booms, recessions, and technological change. The July edition shows renewed optimism, according to the University of Michigan's preliminary results, as the Consumer Sentiment Index climbed to 61.8 from 60.7 in June. This slightly surpasses analyst expectations and marks the index's highest point in five months—February, just after President Donald Trump took office again but months before he shocked markets and allies with his 'Liberation Day' tariffs in April. Still, it's only cause for a muted celebration. Surveys of Consumers Director Joanne Hsu characterized the results as 'little changed' from June, 'inching up about one index point.' She acknowledged that it's a five-month high, but 'it remains a substantial 16% below December 2024 and is well below its historical average.' A closer look at the data shows that high-wealth consumers don't share in the generally improving outlook, either. The glum high-wealth American The Current Economic Conditions Index rose 3.1 points to 66.8, indicating growing confidence in near-term business and job prospects. However, the Consumer Expectations Index—reflecting expectations for the coming six months—rose only slightly to 58.6 and remains down 14.8% from last year. Notably, respondents' outlook on their own finances fell by about 4%, signaling continued individual financial concerns despite the broader improvements. And despite a recent uptick, the surveyors highlight that feelings among high-wealth consumers are still down 17% from December 2024. Short-run business conditions improved about 8%, whereas expected personal finances fell back about 4%. Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen, for example if trade policy stabilizes for the foreseeable future. At this time, the interviews reveal little evidence that other policy developments, including the recent passage of the tax and spending bill, moved the needle much on consumer sentiment. But there has been a movement on expectations around inflation. Inflation expectations drop sharply One of the most pronounced shifts in sentiment concerns inflation. Year-ahead inflation expectations dropped for the second straight month to 4.4%, down from 5.0% in June and from a peak of 6.6% in May, marking the lowest reading since February 2025. Long-run inflation expectations also receded, falling for a third consecutive month to 3.6% (from 4.0% in June). While these are the most moderate readings in months, both remain higher than levels seen in late 2024, highlighting ongoing wariness about longer-term inflation risk. Hsu noted that inflation remains top of mind for many Americans, with renewed optimism tempered by concerns that price increases could reignite, especially in the context of recent trade policy moves. 'Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen, for example if trade policy stabilizes for the foreseeable future,' Hsu explained. Respondents reported that legislative developments such as recently enacted tax and spending bills had little discernible effect on their overall sentiment. The uptick in consumer confidence comes even as recent economic data show robust retail sales and resilient labor markets, suggesting a disconnect between consumer perceptions and macroeconomic trends. For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing. This story was originally featured on Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
4 days ago
- Business
- Yahoo
Are Consumers and Businesses Done Worrying About Tariffs?
Key Takeaways The Michigan Consumer Sentiment survey increased to 61.8 in the preliminary July results, its highest level since February. Manufacturing surveys also reached their highest points in five months, showing that fears over tariffs may be subsiding as economic data continues to show improving conditions. President Donald Trump may make more tariff announcements before an Aug. 1 deadline, but economists said consumers appear to believe inflation impacts will be may not be as terrifying for consumers and businesses as they once were, as a series of surveys show that sentiment is improving even as trade policy remains unsettled. The Michigan Consumer Sentiment Index improved to 61.8 in the preliminary July reading, delivering the highest results since February for the closely watched survey that plunged amid a dizzying string of tariffs announcements by President Donald Trump. The survey showed that consumer inflation expectations for the year ahead declined to 4.4% as fears over future price increases from tariffs faded. This follows a rise in June retail spending. 'Americans are noticing that the economy is resilient against so many headwinds. This is an encouraging sign for consumer spending, and it helps explain that the surprising bounce back in retail sales in June was part of a more confident consumer outlook,' said Heather Long, chief economist at Navy Federal Credit Union. Manufacturing Surveys Part of Trend of Improving 'Soft' Data Meanwhile, a pair of manufacturer surveys this week indicated that businesses also feel better about the economic environment. The New York Federal Reserve's Empire State Manufacturing Index gained 22 points in its July survey, while a similar survey by the Philadelphia Federal Reserve showed a similar increase. Both cited improved business activity and better sentiment over future business conditions. The improvement of the 'soft' data in survey results comes as 'hard' economic data continues to indicate that inflation remains modest, the job market remains healthy and consumers continue to spend money. 'While tariffs and the administration's recent new threats are casting a hovering cloud of uncertainty over attitudes, consumers and businesses aren't as fearful now,' said Oren Klachkin, financial market economist for Nationwide. 'Stock market gains, calmer inflation nerves and positive economic trends are instilling consumers with better attitudes.' More Tariffs Announcements on the Horizon However, the good vibes may not last. Trump has announced that tariffs on Mexico, Canada, the European Union, and other trading partners could increase if deals aren't reached before an Aug. 1 deadline. However, consumers could also factor those import taxes into their outlook. 'Despite risks of rising consumer inflation in the next few months, consumers have well-anchored expectations that tariff inflation will be temporary, and that conditions should improve by the time we enter 2026,' said Jeffrey Roach, chief economist at LPL Financial. Read the original article on Investopedia
The Independent
4 days ago
- Business
- The Independent
Stocks climb as market is buoyed by Trump's decision not to fire Powell
Stock prices in London closed higher on Friday, with markets maintaining the optimism that prevailed after US President Donald Trump said on Wednesday that it was 'highly unlikely' that he would fire Federal Reserve chair Jerome Powell. Meanwhile, also in the US, preliminary data from the University of Michigan showed that consumer sentiment improved marginally in July. However, overall confidence remains well below recent highs and historical norms. The FTSE 100 index closed up 19.48 points, 0.2%, at 8,992.12. The FTSE 250 ended up 131.83 points, 0.6%, at 21,898.26, and the AIM All-Share closed up 3.85 points, 0.5%, at 772.78. On AIM, Metals One closed up 3.3%. The mineral developer with projects in Norway and Finland has completed the acquisition of a 10% interest in NovaCore Exploration Inc, which is advancing the Red Basin uranium project in New Mexico. Metals One has acquired the stake with a share subscription worth 300,000 US dollars (£223,000), and said it has also been granted warrants to increase its ownership to 30%. PHSC fell 9.3%. The provider of health, safety, hygiene and environmental consultancy and security solutions reported a pretax loss of £127,419 for the year to the end of March, swinging from a profit of £332,317 in the prior year. Sales revenue fell 15% to £3.2 million from £3.8 million. PHSC also declared no dividend, down from a total dividend of 2p last year. Small-cap Sure Ventures closed 3.0% higher. The venture capital fund, backing early-stage AI, AR and VR, and IoT companies, said net asset value per share at March 31 was 175.79 pence, more than doubled from 82.53p a year earlier. NAV total return was 113% against a negative 31.25% a year prior. Also, Sure swung to pretax profit of £7.4 million from a £2.5 million loss the year before, as total net income increased to £8.0 million from a £2.1 million loss. It said this was primarily driven by 'two key exits' from the Fund I portfolio. In European equities on Friday, the CAC 40 in Paris closed up 0.1%, while the DAX 40 in Frankfurt ended down 0.4%. The eurozone's current account surplus grew by less than anticipated in May, data from the European Central Bank showed. The single-currency area's surplus grew to 32.31 billion euros (£28 billion) in May from 18.64 billion euros (£16.16 billion) in April, less than the increase to 34.8 billion euros (£30.2 billion) expected by market consensus cited by FXStreet. In the 12 months to the end of May, the current account surplus fell to 333 billion euros (£288.7 billion), or 2.1% of eurozone GDP, from 364 billion euros (£315.6 billion) and 2.5% of GDP a year prior. The decline was mostly driven by a shift from a surplus of 34 billion euros (£29.5 billion) to a deficit of 5.0 billion euros (£4.33 billion) for primary income. Separately, Eurostat reported that annual growth in construction output slowed to 2.9% in May from 4.7% in April. On a monthly basis, eurozone construction output declined by 1.7% in May, after 4.3% growth in April from March. The pound was quoted higher at 1.3444 dollars at the time of the London equities close on Friday, compared to 1.3414 dollars on Thursday. The euro stood at 1.1656 dollars, higher against 1.1594 dollars. Against the Japanese yen, the dollar was trading slightly lower at 148.44 yen compared to 148.48 yen. Stocks in New York were mixed. The Dow Jones Industrial Average was down 0.3%, the S&P 500 index up marginally, and the Nasdaq Composite up 0.1%. The yield on the US 10-year Treasury was quoted at 4.42%, narrowing from 4.45%. The yield on the US 30-year Treasury was quoted unchanged at 4.99%. The University of Michigan's index of US consumer sentiment rose to 61.8 in July from 60.7 in June, up 1.8% on the month but still 6.9% lower than the level recorded in July 2024. The reading marked a five-month high but remained 16% below December 2024. The current economic conditions index climbed to 66.8 from 64.8 in June, a 3.1% monthly gain and a 6.5% increase from a year earlier. However, the index of consumer expectations edged up just 0.9% to 58.6, down 15% on the year. ' Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen,' said Joanne Hsu, director of the survey. She noted that the recent tax and spending bill had little impact on sentiment, while concerns over trade policy continue to weigh on consumer confidence. Also, US housing starts rose modestly in June, rebounding from the previous month, but completions slumped to their lowest level since early 2023, according to data released on Friday by the US Census Bureau and the Department of Housing & Urban Development. Privately-owned housing starts increased to a seasonally adjusted annual rate of 1.32 million in June, up 4.6% from May's revised figure of 1.26 million. However, the total remained slightly below the June 2024 rate of 1.33 million. Housing completions tumbled 14.7% from May to 1.31 million, down 24.1% compared to a year earlier. Single-family completions dropped 12.5% to 908,000, and multifamily completions fell to 383,000. The sharp decline in completions signals continued supply constraints in the housing market, despite a slight pickup in new starts. Brent oil was quoted at 69.41 dollars (£60.17) a barrel at the time of the London equities close on Friday, up from 68.94 dollars (£59.77) late Thursday. Gold was quoted higher at 3,352.48 dollars (£2,496.36) an ounce against 3,338.20 dollars (£2485.72). The biggest risers on the FTSE 100 were: Rentokil, up 10.3p at 357.3p; Antofagasta, up 47p at 1,868.5p; Intermediate Capital, up 50p at 2,156p; 3i, up 96p at 4,340p; and Whitbread, up 61p at 3,182p. The biggest fallers on the FTSE 100 were: GSK, down 65p at 1,348p; Mondi, down 23.3p at 1,144.2p; ConvaTec, down 3.6p at 238p; Informa, down 9.2p at 836.6p; and Croda International, down 31p at 2,846p. On Monday's economic calendar, there is an interest rate call from China, consumer inflation from Hong Kong, and Canada's producer inflation. Japanese markets will be closed for Marine Day. On Monday's UK corporate calendar, Mony Group releases half-year results and Ryanair has its first-quarter report.
Forbes
4 days ago
- Business
- Forbes
Consumer Confidence Rises Even As Inflation Does, Too
Consumer sentiment improved above expectations last month to a five-month high as Americans appear to be less worried about inflation—even as it spiked this month—according to the University of Michigan's monthly survey released Friday, though those polled still see a 'substantial risk' inflation could rise in the future. While inflation expectations have improved, consumers still foresee a "substantial risk" that ... More inflation will jump in the future. Getty Images A preliminary reading of the University of Michigan's consumer sentiment survey was 61.8, above June's reading of 60.7 and slightly above the Dow Jones estimate for 61.4, the strongest sentiment level since February (64.7). This is a developing story .
