The University of Michigan’s final July reading of US consumer long-term inflation expectations was marked up slightly, hovering near an 11-year high and weighing on sentiment.
Respondents said they see inflation rising 2.9% over the next five to 10 years, up from a preliminary reading of 2.8%. They see costs rising 5.2% over the coming year, matching the initial print earlier in the month.
The University of Michigan’s final sentiment index improved to 51.5 from an historic low of 50 in June, data released Friday showed.
“Inflation continued to dominate consumers’ attention, and labor market expectations continued to soften,” Joanne Hsu, director of the survey, said in a statement.
Nearly half of respondents said inflation is weighing on their personal finances, which was exceeded only once before — in 1951. The year-ahead economic outlook dropped to the lowest level since 2009, Hsu said.
A measure of expectations slipped to 47.3 this month, the weakest since 1980, from 47.5 in June. The current conditions gauge rose to 58.1 from 53.8, which may reflect a decline in gasoline prices.
“Consumers are finding ways to cope by altering their spending patterns as high prices persist,” Hsu said. “Going forward, these behavioral adjustments are likely to grow.”
Government figures earlier Friday showed inflation-adjusted spending barely rose last month as a closely watched price gauge rose to a 40-year high. Separate data showed employment costs climbed by more than expected in the second quarter, stoking concerns price pressures will remain persistent.