U. S. consumer confidence unexpectedly fell to a five-month low in early July as growing concerns about rising prices led to a sharp deterioration in buying conditions for big-ticket items.
Data released on Friday showed that the University of Michigan's consumer confidence index fell to 80.8 in early July from 85.5 the previous month, below economists' expectations, and the survey's median forecast was 86.5.
Consumer forecasts for inflation in the coming year reached 4.8%, the highest level since August 2008. At the same time, their long-term expectations for prices are also rising. Inflation is expected to rise to 2.9% over the next five to 10 years, up from 2.8% last month.
"inflation has put more pressure on living standards, especially for low-and middle-income families, and has led to delays in bulk non-essential purchases, especially in high-income families," Richard Curtin, director of the survey, said in a statement.
Curtin said "consumer complaints about rising prices for homes, vehicles and household durable goods" reached an all-time high. An index of the University of Michigan's durable goods purchase program fell to 101 in early July, the lowest level since the peak of the epidemic in April 2020.
Consumer attitudes towards cars and homes fell to their lowest level since 1982, according to the report. Only 30% of consumers said they had favorable conditions for buying homes, the lowest since September 1982.
The current situation index fell from 88.6 to 84.5 in July, the lowest level since August last year. Expectations fell from 83.5 to a five-month low of 78.4.
Despite concerns about rising prices, leisure-related spending is likely to increase as more and more Americans return to summer travel.
The increase in spending on services will complement the still solid demand for physical goods.