As the Fed prepares to meet this week, when it is very likely raise interest rates again to keep battling down inflation, there’s been a bit of good news on the consumer front.
Consumers now expect inflation to fall below 4% in the coming year. According to the University of Michigan’s Consumer Sentiment Index, inflation expectations have now fallen for the past four months.
Consumer sentiment hit rock bottom last summer, as inflation spiked. In the past few months, consumers have perked up a bit as prices, especially for gasoline, have fallen. But University of Michigan consumer survey director Joanne Hsu said sentiment is still near decade-lows.
“Even though inflation has moderated and consumers feel better than they did a few months ago, they still feel pretty bad about the economy—like prices are really high and their personal finances have been eroded by inflation,” Hsu said.
Meanwhile, most Americans still feel pretty confident about their job security. That is, except recently, said Jesse Wheeler at polling firm Morning Consult.
“High-income workers have been spooked by those frequent announcements of layoffs that we’re seeing at major firms in tech and finance,” Wheeler said.
According to Wheeler, high-income workers are more anxious now, while low-income workers remain upbeat, because of the strong job market and rising wages.
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