US Consumers Feel a Little Less Bad

Consumers are feeling better now than they have all summer, but—historically speaking—they’re still about as downbeat as can be, per the Wall Street Journal, citing data from the latest University of Michigan consumer sentiment survey. In June, the survey hit its lowest point in decades, despite historically low unemployment. And while the stock market is in bear territory, it’s nothing like the 2008 crash or others since the early 1980s. Inflation is the one sure thing on everyone’s mind, with consumers expressing “strong concerns that inflation will continue to erode their incomes,” according to survey director Joanne Hsu. Meanwhile, consumer spending remains relatively strong, but sustained pessimism could cause people to tighten the purse strings, threatening the broader US economy.

Per Reuters, a recent drop in gas prices helped drive the uptick in sentiment and ease concerns over long-term inflation. The University of Michigan isn’t the only one surveying consumers. The Conference Board, which focuses more on general economic and labor market conditions, also showed marked improvement, including a confidence reading of 103.2—not great, but at least it’s above the baseline of 100 for the first time since May, as CNN reports. After months of soaring gas prices and interest rates, combined with flailing stocks, "consumers look very reassured that the direction has stopped getting worse,” according to one economist. Although consumers continue to express concern over the prospects of long-term inflation, the surveys are in keeping with a recent report from the New York Fed showing “inflation expectations at both the one-year and three-year horizons falling notably,” per Reuters. This in turn may prompt the Fed to dial back interest rate increases. (More consumer confidence stories.)