U.S. Consumer Sentiment Sinks as Inflation Expectations Soar
Last edited Fri Mar 11, 2022, 12:29 PM - Edit history (1)
Source: Bloomberg
Markets
Economics
U.S. Consumer Sentiment Sinks as Inflation Expectations Soar
-- Michigan sentiment gauge drops to 59.7, lowest since 2011
-- One-year ahead inflation expectations hit four-decade high
By Emma Kinery
March 11, 2022, 10:00 AM EST Updated on March 11, 2022, 10:08 AM EST
U.S. consumer sentiment tumbled in early March to the lowest since 2011 and year-ahead inflation expectations rose to a four-decade high in the aftermath of Russia's invasion of Ukraine.
The University of Michigan's sentiment index dropped to 59.7, from 62.8 in February, data released Friday showed. The median estimate of economists in a Bloomberg survey called for a reading of 61. Consumers expect prices to rise 5.4% over the next year, the highest reading since 1981, according to the data.
The report showed the highest-ever share of Americans expecting their finances to worsen in the coming year, evidence of the growing toll inflation is having on incomes. Prices at the grocery store and gas pump were rising even before the war, which is now making those purchases that much harder.
A gauge of current conditions decreased to 67.8 in early March, the lowest since 2009. The survey's measure of future expectations declined to 54.4, the weakest since 2011. Inflation expectations over the next five to 10 years held at 3%. ... That may offer some assurance to the Federal Reserve, who's trying to keep long-term inflation expectations from spiraling out of control. The central bank is likely to raise interest rates next week, its first hike since 2018.
{snip}
Read more: https://www.bloomberg.com/news/articles/2022-03-11/u-s-consumer-sentiment-sinks-as-inflation-expectations-soar
I'll be adding my own personal data point when I go to the Aldi this afternoon.
The source:
http://www.sca.isr.umich.edu/
IronLionZion
(45,256 posts)as prices rise sky high, it's supposed to encourage new production and more competition.
FBaggins
(26,695 posts)Yes - if prices rise sky high on a loaf of bread because the grocer knows that he has a captive market and you have few other choices... someone will eventually enter the market at a lower (though still profitable) price point.
But if that price is sky high because the supplying bakery's prices have also gone up... and his prices have gone up because flour is more expensive... and the flour is more expensive because wheat prices are through the roof... and those prices are through the roof because fertilizer costs have doubled and fuel for the tractors has gone up and labor all along the way has gotten more expensive...
... then new competition can't help - because the new competitor can't get bread any cheaper than the first grocer can.
melm00se
(4,973 posts)that for the last decade and a half the economy has not been a free market.
US monetary policy has been laying the foundation for what we are seeing right now.
All the quantitative easing since the financial crisis c. 2007 (buying a large number of long-term securities has pumped a lot of money into the economy) was done to solve short term economic crisis in exchange for a long term issue. The hope (and "hope" is not a plan) was that the long term consequences would never happen or, in other words, this:
Chainfire
(17,305 posts)The people who ultimately determine the price of goods profit twice from the inflation. They pad their pocketbooks and insure that the Democrats will be blamed. "See, this is what we told you would happen if you put a Democrat in the White House." We are doubly screwed. The balance of justice in America keeps leaning further and further to the right.
The only thing that we can do to fight back is to not buy a damn thing that we don't need for survival and that is like using a slingshot to attack an aircraft carrier. I will keep stuffing my spending money in my mattress and staying at home.
I so hate where we are headed. The only way to stop the journey is to jump the tracks and try to survive the wreck.
Response to Chainfire (Reply #2)
Chin music This message was self-deleted by its author.
Chainfire
(17,305 posts)by keeping it from the poor.
Historic NY
(37,449 posts)and that too is driving up or down the number. I started seeing GM offering new 2021-22 cars and trucks. You know, the ones that were built to sit on desert lots. The lack of new cars drove the used car market out of sight. That was a major inflation point, when chips weren't available. What I don't understand is why all these companies that cut production have remained at pandemic levels. The answer increased profits on limited production. Look at meat and chicken prices. If they were producing more with less in 2020 WTF happened in 2021 & 2022. An election of a Democrat over a Republican darling?????
mahatmakanejeeves
(56,886 posts)U.S. consumer sentiment falls in early March as inflation worries mount
Fri, March 11, 2022, 10:23 AM
WASHINGTON (Reuters) - U.S. consumer sentiment fell more than expected in early March as gasoline prices surged to a record high in the aftermath of Russia's war against Ukraine, a survey showed on Friday. ... The University of Michigan said its preliminary consumer sentiment index dropped to 59.7 in the first half of this month from a final reading of 62.8 in February.
Economists polled by Reuters had forecast the index falling to 61.4. Following Russia's invasion of Ukraine on Feb. 24, crude oil prices jumped more than 30%, with global benchmark Brent hitting a 2008 high at $139 a barrel, before retreating to trade around $110 a barrel on Friday.
U.S. gasoline prices are averaging a record $4.331 per gallon compared with $3.48 a month ago, AAA data showed. ... Further increases are likely after President Joe Biden on Tuesday banned imports of Russian oil into the United States, as part of a wide ranging tough sanctions against Moscow.
The University of Michigan survey's gauge of current economic conditions slipped to a reading of 67.8 from 68.2 in February. Its measure of consumer expectations declined to 54.4 from 59.4 in February. ... The survey's one-year inflation expectations jumped to 5.4%, the highest since 1981, from 4.9% in February. Its five-year inflation was steady at 3.0%. ... The government reported on Thursday that consumer prices recorded their largest annual increase in 40 years in February.
(Reporting by Lucia Mutikani)
Tommymac
(7,263 posts)I don't understand it. At least give the OP header a neutral spin - not splash 1% reTHUG negativity in every DU'er's face on The Front Page ...for days!!!!
mahatmakanejeeves
(56,886 posts)It's hard to sugarcoat this one.
https://news.google.com/search?for=consumer+sentiment
Thanks for writing.
Tommymac
(7,263 posts)Sinks and Soar are emotionally charged words.
Thanks for answering.
Magoo48
(4,659 posts)Our own Oligarchs are gouging and dont give a shit who sees. Hell, most of corporate America is making profits right now.
Put a hold on all subsidies until they see reason.
Encourage all Americans to drive less.
He should threaten them with sanctions. Have the DNC plaster their quarterly and annual profits all over every type of media known to humanity.
Deminpenn
(15,246 posts)at grocery stores with some prices coming down, fwiw. And more items on sale, too.