US consumer sentiment dropped in July to its lowest level in eight months as persistent high prices and stubbornly high inflation continued to erode confidence in personal finances.
According to the University of Michigan, the final July sentiment index fell to 66.4 from 68.2 in June. The preliminary reading for the month had been 66, indicating a downward trend in consumer confidence.
Consumer sentiment has been mired at a low level for the past three months, as households’ views of the economy remain extraordinarily negative.
Consumers now expect prices to rise at an annual rate of 2.9 percent over the next year, marking the lowest expectation in four months and slightly down from the 3 percent anticipated in June. Over the next five to ten years, Americans see costs climbing at an average of 3 percent, unchanged from the previous month.
This dip in sentiment reflects the ongoing high cost of living and elevated borrowing costs, leading to pessimistic views and expectations about personal finances. Despite inflation showing signs of cooling, wage gains have been modest, and many Americans have likely exhausted their pandemic-era savings.