"It's a slip in confidence from recent highs rather than the start of a new downward,"
- Gennadiy Goldberg, a strategist at TD Securities Inc.
Mood among consumers in the world's largest economy cooled unexpectedly in July, as Americans became more pessimistic about the outlook for the economy. Survey conducted by the Thomson Reuters/University of Michigan's showed that preliminary reading on the overall index of consumer sentiment turned lower to 83.9, down from 84.1 in June, shy of forecasts for 85 reading. At the same time the barometer of current economic conditions jumped to 99.7 compared with 93.8 a month earlier, and reaching the highest level since July 2007, however, a measure of consumer expectations slipped to 73.8 from 77.8. Even though mood improved amid lower income of households, there was a drop in those making more than $75,000 per year, as more people worried about higher interest rates.
Other figures on Friday showed that prices paid to producers increased 0.8% in June, slightly more than projected and posting the biggest monthly gain since September. In April producer prices increased just 0.5%. In addition to that inflation expectation is now hovering around 3.3% over the next 12 months, 0.3% higher from June's estimates. Meanwhile, Americans expected consumer prices to rise 2.9% over the next five years, matching the previous three months.
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