Consumer sentiment has sharply declined to its lowest level in eight months, posing a challenge to the Biden campaign's hopes of leveraging easing inflation to bolster voter confidence in the economy.
Consumer sentiment has plunged to its lowest level in eight months, delivering a setback to the Biden campaign's expectations that a recent decline in inflation would improve voter perceptions of the economy. According to the preliminary reading from the University of Michigan, the consumer sentiment index dropped unexpectedly to 66 in early July, down from 68.2 at the end of June. Economists had anticipated a slight increase to 68.5.
Joanne Hsu, director of the survey, highlighted that consumers continue to express frustration over persistently high prices, with nearly half citing concerns that these costs are eroding their living standards—a sentiment echoing levels seen two years ago during peak inflationary periods.
Both indices measuring current economic conditions and future expectations declined in July, underscoring broader unease among consumers. Interestingly, despite ongoing attention on the presidential debates and their potential impact, there is little evidence that recent political discourse has significantly altered consumer economic outlooks.
"With the upcoming election, consumers perceive substantial uncertainty in the trajectory of the economy," noted Hsu, indicating a cautious sentiment prevailing despite recent economic indicators.
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