- Richard Curtin, survey director
Consumer morale in the U.S. unexpectedly declined in July to the lowest level in four month, while index of consumer expectations fell for a third consecutive month as Americans' outlook for the country's economy worsened. The Thomson Reuters/University of Michigan's preliminary July reading of sentiment slipped to 81.3, down from 82.5 recorded in June, whereas economists had called for a July reading of 83. The survey's gauge of current economic conditions rose to 97.1 from 96.6, while the barometer of consumer expectations fell to 71.1 from 73.5. Higher prices at grocery-store checkout lines are undermining Americans' confidence and straining household budgets as they take a bigger bite out of workers' paychecks. A timid pickup in wage growth, a higher cost of living increase the risk that consumer spending, which accounts for almost 70% of the nation's economy, is likely to wane. More rapid income growth would help ease the burden of higher prices. The cost of living, as measured by the consumer price index, rose 2.1% in May from the same month last year, the biggest advance since October 2012. Food costs in May climbed as much as 0.5% from a month earlier, the most since August 2011.
Americans see an inflation rate of 3.3% over the next year, compared with 3.1% in the previous month. Over the next five to 10 years, they expect a 2.6% rate of inflation, the lowest since March 2009, compared with the 2.9% expectation posted in June.
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