Posted on 07/18/2025 7:46:36 AM PDT by thegagline
The University of Michigan's Survey of Consumers for July showed overall sentiment rose 1.8% from June to 61.8, exactly in line with the estimate and at the highest since February.
On inflation, the outlook at both the one- and five-year horizons both tumbled, falling to their lowest levels since February. Consumers' worst fears about tariff-induced inflation have receded, though they are still wary of price increases to come, according to a University of Michigan survey Friday. The university's closely watched Survey of Consumers for July showed overall sentiment increased slightly, rising 1.8% from June to 61.8, exactly in line with the Dow Jones consensus estimate and at its highest level since February. Questions on current conditions and future expectations produced monthly gains as well.
On inflation, the outlook at both the one- and five-year horizons both tumbled, falling to their lowest levels since February, before President Donald Trump made his "liberation day" tariff announcement on April 2.
The one-year forecast plunged to 4.4%, down from 5% in June and well off the 6.6% level in May, which was the highest reading since late 1981. For the five-year outlook, the expectation slid to 3.6%, down 0.4 percentage point from June.
"Both readings are the lowest since February 2025 but remain above December 2024, indicating that consumers still perceive substantial risk that inflation will increase in the future," survey director Joanne Hsu said in a statement.
Indeed, the respective outlooks in December were for 2.8% and 3%, largely in line with readings throughout 2024, before Trump took office in January.
(Excerpt) Read more at nbcboston.com ...
One thing the “experts” seemed to have missed is that consumers are carrying record levels of debt, at relatively high interest rates, and are therefore are somewhat constrained in their spending habits. Less spending reduces inflationary pressures.
The US is basically Walmart. When Walmart demands price reductions, everyone else gets a price increase. Unmatched American buying power, due to It being the home base of dominant and highly-profitable megacorps like Nvidia, Eli Lilly, Procter and Gamble, McDonald’s and so on, means exporters have no other choice. Corporations have chased sales to sanctions-hit Russia into Central Asia. They can’t possibly replace US sales, which are ~12x the size. It is the oceans of cash from these corporate behemoths that underpin US reserve currency status and military power.
Could it be that the reason the inflation estimates are wrong is that the enemy has not been successful with his attempts to crash the economy?
Could it be that Trump is aware of the treachery and is defeating it?
Good points
Ya, not bad. Good catch.
The article is about tariff induced inflation expectations. This is largely babble. No one really cares what induces inflation, and no one knows if there will be inflation or not, for whatever reason.
The CPI was up. Don’t care about expectations. Care about the number. The CPI for June was up and odds seem high the PCE will be to.
Oh and no law of the universe says interest rate cuts goose inflation, or that rate increases attack it.
The interest rate is the cost of money. If the cost goes down, it increases the supply of money being put into circulation. Increase in the money supply is the definition of inflation. Tariffs redistribute the money supply but do not increase it. That’s why tariffs do not cause inflation.
I go to grocery stores several times a week (I don’t like to eat out for various reasons). I chat with other shoppers about brands, prices, etc. and most of them are in a restrained buying mode. Inflation is a very hard thing to subdue.
June CPI rose 2.7% on an annual basis. On a month-over-month basis, the CPI rose 0.3%, which is the largest increase since January.
Babble is an understatement. Surveying the public regarding anything factual is a fool’s errand. By definition, half of those surveyed had IQs under 100. “Experts” are only slightly better.
EC
Economists are always wrong. The university departments & think tanks are paid for by bankers & hedge funds, who profit off the trade deficit.
Speaking honestly about tariffs is a guaranteed way to never get tenure.
CNN, ABC, MSNBC, and the Democrat party are devastated at this potential news.
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