Economic Indicators: Minimal Change to Consumer Sentiment in July
July 15, 2024
According to the University of Michigan Surveys of Consumers, consumer sentiment registered at 66.0 in July 2024. According to Surveys of Consumers director, Joanne Hsu, sentiment is more than 30% above the trough from June 2022, it remains stubbornly subdued. Nearly half of consumers continue to express concern about high prices, even as inflation is expected to continue moderating in the years ahead. With the upcoming election, consumers perceived substantial uncertainty in the economy’s trajectory, though there is little evidence that the first presidential debate altered their economic views. Read the full report.
The Consumer Sentiment Index is a statistical measurement that provides an economic indicator of consumers’ opinion and optimism of the state of the economy.
Chamber Perspective
July’s consumer sentiment of 66.0 is stable over the last month and significantly above the lows seen in 2022. Yet, in 2024, consumers are still expressing concern about inflation. The sentiment contrasts with the latest consumer price index of 3.0% which showed inflation is slowing both on an annual and monthly basis. The May 2024 Detroit Regional Chamber Michigan Voter Poll indicated that nearly a quarter of voters believe inflation is more than 8% when asked what the rate of inflation was over the past year. Annual inflation readings have been under 4% for over a year now. This prominent disconnect between consumers’ perceptions and economic realities is a challenge business and government leaders will need to address. As we move into the second half of the year, the prospect of interest rate changes tied to the continued slowing of inflation as well as the economic effects of the election will be top-of-mind.