By Harriet Torry
WASHINGTON -- American households remained relatively confident about the economy in early July, and their expectations for longer-run inflation firmed.
The University of Michigan said Friday its index of consumer sentiment was 98.4 in July, up slightly from June's final reading of 98.2.
That fell short of the 99.0 economists expected for the month's preliminary reading; a final figure for July will be released Aug. 2.
"Consumers continue to feel very good about their personal finances," said Amherst Pierpont Securities economist Stephen Stanley, "but somewhat less positive than before about the broad economic outlook."
The details of Friday's report were mixed. An index tracking sentiment about current economic conditions declined slightly in July, while an index tracking expectations about the future picked up marginally from June.
A wide partisan split persists in the Michigan survey between downbeat Democrats and upbeat Republicans. The overall sentiment index for self-identified Democrats was 75.5 in July, versus 121.5 for self-identified Republicans. Independents were in the middle, clocking in at 100.5 for the month.
In the July survey, longer-term inflation expectations reversed a dip seen in the prior month. Consumers now expect inflation of 2.6% in five to 10 years, up from 2.3% in June, while household expectations for near-term inflation weakened slightly in July to 2.6%.
"The Federal Reserve cannot cite these data as evidence of any worrying shift in inflation expectations," said Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a note to clients.
The Fed is widely expected to lower what is now a federal-funds target-rate range of 2.25% to 2.50% at the end of this month. Weak inflation is one factor giving central-bank officials concern, alongside risks from general business uncertainty and trade-policy worries.
Year-over-year inflation, as measured by the Commerce Department's personal-consumption expenditures price index, was 1.5% in May, falling short of the Federal Reserve's 2% target.
Write to Harriet Torry at firstname.lastname@example.org
(END) Dow Jones Newswires
July 19, 2019 12:07 ET (16:07 GMT)
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