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The US Consumer Confidence Index has risen slightly, while inflation expectations have continued to decline.
On July 18, Joanne Hsu, director of the University of Michigan Consumer Survey, stated that U.S. consumer confidence has changed little compared to June, with a slight rise of about 1 point to 61.8. Although this index has reached a five-month high, it is still approximately 16% lower than in December 2024 and far below historical averages. Unless consumers are confident that inflation is unlikely to worsen, such as trade policies tending to stabilize in the foreseeable future, they are unlikely to restore their confidence in the economy.
The current interview results show almost no significant impact of other policy changes (including the recently passed tax and spending bills) on consumer confidence. Inflation expectations for the coming year have declined for the second consecutive month, dropping from 5.0% last month to 4.4% this month.
Long-term inflation expectations have fallen for the third consecutive month, dropping from 4.0% in June to 3.6% in July. Both indices are at their lowest levels since February 2025, but still above December 2024, indicating that consumers still believe there is a significant risk that inflation will rise in the future.