The once-must-watch inflation expectation signal from UMich's sentiment survey unexpectedly rebounded higher in preliminary July data - with expectations for the next year up from 3.3% to 3.4% (notably above the expected drop to 3.1%). Expectations for longer-term inflation also rise...

Headline confidence was expected to rise in the preliminary July data and it did bigly... Sentiment rose to its highest since Sept 2021 at 72.6 with both current and expectations indices soaring...

“The sharp rise in sentiment was largely attributable to the continued slowdown in inflation along with stability in labor markets,” Joanne Hsu, director of the survey, said in a statement.

Buying Conditions surged for durable goods and increased for houses...

High prices have been most challenging for lower-income households. Hsu said that sentiment improved for all groups except lower-income consumers.

Sentiment for Democrats and Independents soared in preliminary July data, Republican confidence rose only modestly...

Confidence is likely correlated to the surge in stocks but the rebound in inflation does not fit with the CPI narrative.

...both short- and long-term inflation expectations surprised to the upside.
{ai:summary}In July, inflation expectations unexpectedly rebounded higher, with expectations for the next year rising from 3.3% to 3.4%, contrary to the expected drop to 3.1%. Sentiment also rose to its highest level since Sept 2021, attributed to the slowdown in inflation and stability in labor markets. Buying conditions improved for durable goods and houses. The rise in sentiment was seen across all groups except lower-income consumers. While confidence is likely correlated to surging stocks, the rebound in inflation contradicts the CPI narrative. #economy

UMich Inflation Expectations Unexpectedly Rebounded In July; Democrats' Confidence At 2-Year Highs

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