UoM consumer confidence down a touch, inflation expectations slip

The early month August read on consumer confidence from the UoM saw its index slip a touch to 71.2 from 71.6 but still up from 64.4 in June. The internals were mixed as Current Conditions rose .8 pts offset by a 1 pt drop in Expectations. The one yr inflation expectations view ticked down by one tenth to 3.3% and the longer term 5-10 yr view did as well to 2.9% from 3%. Of particular note, the slight drop in inflation expectations came even as there was a 9 pt jump in those who think gasoline prices will go higher over the coming 12 months and that is a price that most see every single day.

There was a lift in the mean % of expecting family income will beat inflation over the next 5 yrs to 36.9% from 36.5%. The low this year was 35.5% and it was 37.2% in February.

Digging in further, employment expectations were little changed but after an 11 pt jump last month. The income component rose 2 pts to 9 but it was 10 back in March. With regards to spending intentions, it was mixed. There was a 1 pt rise in those who think it’s a good time to buy a vehicle but a 3 pt drop in plans to buy a home. As for a major household item, there was a 6 pt rise to the highest since June 2021 as more people are ‘stuck’ in their home because of the low mortgage rate they have and stuff breaks.