U.S. consumer sentiment ticked up a bit in October, however, inflation was still a drag on the incomes of a lot of American households.
The Michigan University’s consumer confidence index grew by 59.9 for October up from 58.6 in the month before as per data released on Friday.
The index is exactly in accordance with economists’ predictions in the latest Wall Street Journal poll.
“With the sentiment index just 10 points higher than the all-time low of June, the news of a decline in spending by consumers in the third quarter should come as not a surprise,” According to Joanne Hsu, the director of the monthly survey.
The buying conditions for durable products – defined as products that last for three years – grew by 23 percent in October after supply restrictions decreased. However, the business environment expected for the next year became more difficult by 19%, according to the study revealed.
“These divergent patterns indicate significant uncertainty about inflation, policy responses and global developments and the views of consumers indicate the possibility of a recession coming to the global economy,” Hsu said.
Expectations for inflation in the United States grew in October after having slowed down in September. Consumers anticipate prices to climb upwards by 5 percent in the next 12 months, in contrast to the 4.7 percent increase anticipated for the previous month.
Expectations for inflation in 5 years rose to 2.9 percent, up from 2.7 percent the month preceding.
The study came as the most severe U.S. inflation in four decades. According to economists, this was due to the administration’s extravagant spending.
A customer shop at a grocery store within Washington, D.C., the United States, on Oct. 28th 2022. U.S. consumer sentiment ticked slightly upwards in October however, inflation continued to stifle the incomes of a lot of American households.