Slower Inflation Fosters Optimism in U.S. Economic Sentiment
Understanding the Impact of Slower Inflation
Slower inflation is significantly boosting Americans’ attitudes toward the economy this month, resulting in a noteworthy improvement in consumer sentiment. According to the University of Michigan’s latest consumer survey, sentiment rose by 2% from August, breaking a period of stagnation. Despite improvements, it remains shy of pre-pandemic levels.
Key Findings from Consumer Surveys
- Sentiment is 40% higher than the low in June 2022
- Buying conditions for durable goods have improved
- Expectations for inflation rates have declined
Joanne Tsu, director of the university’s Surveys of Consumers, noted: “The gain was led by an improvement in buying conditions for durables, driven by more favorable prices as perceived by consumers.”
Political Climate and Economic Outlook
The survey indicates that a growing share of both Republicans and Democrats expect Vice President Kamala Harris to win against former President Donald Trump.
- Consumer optimism has a direct link to political confidence.
- This positive sentiment reflects greater expectations for the economy.
US consumers feel more upbeat about the inflation’s trajectory, with expectations declining for the fourth consecutive month, reaching the lowest levels since December 2020.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.