U.S. consumer confidence fell more than expected in June, reaching a new all-time low from depressing inflation, according to a preliminary study released by the University of Michigan on Friday.
Thus, the index lost 14.4% compared to May, settling at 50 points, compared to 50.2 of the preliminary assessment և analysts’ forecasts. Almost every two consumers (47%) blame inflation for the decline in living standards. Almost 80% of consumers expect:in difficult timesfor business conditions during the year.
«Consumers, regardless of income, age, education, geographical origin, political affiliation, what shares they have or do not have, have all noticed sharp declines.“, Emphasized the director of the investigation Joan Hsu. «Consumers also expressed the highest level of long-term inflation uncertainty since 1991.“, – mentioned the economist. Inflation in the United States is at a record high of 8.6% per year, the highest in 40 years according to the Consumer Price Index (CPI).
«It is expected that the risks of rising inflation, particularly from rising energy and food prices, will continue to affect long-term inflation expectations.commented Mahir Rashid, an economist at Oxfordeconomics. When households expect prices to continue to rise, they consume even less, which threatens to deepen the recession, while consumption is the locomotive of the US economy, which accounts for almost three-quarters of GDP.
«Further growth of expectations“On inflation by consumers.”The US Federal Reserve (Fed) may launch an even more aggressive campaign to raise interest rates, which will reduce growth and affect consumer sentiment.The economist added. The Fed has tripled key interest rates in recent months, from 0% to 1.50% to 1.75%. Its president, Jerome Powell, reiterated to Congress on Thursday that fighting inflation by raising the value of money “unconditionaland confessed that in return there was apossibilityrecession.
Source: Le Figaro
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