Consumers are feeling the pinch from higher inflation, U.S. sentiment survey shows, and they don't like it

Dow Jones2021-05-28

The numbers: Rising inflation has cast a shadow over the U.S. economic recovery as Americans pay higher prices for a variety of goods and services ranging from steaks to used cars to plane tickets, according to a closely followed consumer survey.

The second and final reading of the consumer sentiment index edged up a tick to 82.9 from an initial 82.8, the University of Michigan said Friday. But it was still down sharply from a 13-month high of 88.3 in April.

All three major surveys of consumer confidence fell in May owing to worries about higher prices.

Big picture: For the first time in arguably decades inflation is on the minds of everyone from Main Street to Wall Street to Washington. Prices are soaring after years of hardly any inflation.

The Federal Reserve, the nation's inflation watchdog, insists prices will come back down once the economy has mostly recovered from the coronavirus pandemic and pentup demand is satisfied.

The process could take a year or more to play out, though, and keep the debate over inflation raging.

Key details: The surprise decline in consumer sentiment in May was triggered by sudden worries about inflation. Consumer prices have surged this year and jumped more than 4% in the past 12 months -- a 13-year high.

Americans are paying more for virtually everything: groceries, gas, appliances, sporting goods, used vehicles, auto insurance, vacation rentals and so on. That's eating away at their paychecks and some of their hefty savings.

The result: The attitude of Americans right now about their personal finances and broader economy is somewhat subdued despite a huge decline in coronavirus cases. The so-called index of current conditions declined to 89.4 in May from 97.2 in April.

Consumers were also uncertain about what the next six months would bring. The expectation index slipped to 78.8 this month from 82.7 in April.

What they are saying? "Record proportions of consumers reported higher prices across a wide range of discretionary purchases, including homes, vehicles, and household durables,' said Richard Curtin, chief economist of the survey.

Market reaction: The Dow Jones Industrial Average and S&P rose in Friday trades. Stocks held onto gains after the sentiment results.

免责声明:本文观点仅代表作者个人观点,不构成本平台的投资建议,本平台不对文章信息准确性、完整性和及时性做出任何保证,亦不对因使用或信赖文章信息引发的任何损失承担责任。

精彩评论

  • andrew123
    2021-05-31
    andrew123
    Yup ,u need to invest cos u r losing money if u keep money in bank as intetest do not keep pace with inflation. 
  • MengKeng
    2021-05-31
    MengKeng
    That is why I learn to play shares as part of the investment plan.  Do share if anyone have a better way to earn more money so as to cover the growing inflation costs
  • Phantom3349
    2021-05-31
    Phantom3349
    Have to earn more monies from investment to counter the inflation.
  • AhWoon
    2021-05-31
    AhWoon
    I would think so
  • Fredwkh
    2021-05-31
    Fredwkh
    Like and comment pls 
  • Frosty4ever
    2021-05-31
    Frosty4ever
    Not a bad thing if it leads consumers to reduce their outstanding debt. Applies to over leveraged hedge funds etc.  A lot of liquidity in the market that drive up stock prices are these guys, not the penny traders.  
发表看法
105