US consumers' inflation expectations hit 40-year low in May, UofM says
By Alexander Bueso
Date: Friday 14 Jun 2019
(Sharecast News) - Americans' outlook on the economy didn't worsen by as much as had been expected in June, according to the results of a closely-followed survey, but their expectations for inflation dropped to a four-decade low.
A preliminary reading revealed that the University of Michigan's consumer confidence index slipped from a print of 100.0 in May to 97.9 for June.
Ecomomists had expected a reading of 97.0.
Richard Curtin, the survey's director, attributed the move south in confidence to concerns around the global trade picture and slower job growth.
"Some of the decline was due to expected tariffs on Mexican imports, which may be reversed in late June, but most of the concern was with the 25% tariffs on nearly half of all Chinese imports," Curtin said.
"Consumers responded by lowering growth prospects for the national economy, and as a consequence, reduced the expected gains in employment."
Americans' long-term inflation expectations also declined, to reach 2.2% - the lowest level in 40 years.
Consumers' expectations weakened the most, with the corresponding sub-index falling from 93.5 in the month before to 88.6.
The other main sub-index, tracking Americans' views on the current situation, however, improved from 110.0 to 112.5.
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