US July Inflation Expectations Continue to Decline, Consumer Confidence Unchanged

According to Jinshi's report, Joanne Hsu, director of the University of Michigan Consumer Survey, stated that US consumer confidence remained relatively unchanged compared to June, with a slight increase of about 1 point to 61.8. Although the index hit a five-month high, it is still about 16% lower than December 2024 and well below historical average levels. Unless consumers are confident that inflation is unlikely to worsen, such as trade policies stabilizing in the foreseeable future, they are unlikely to regain confidence in the economy. Current survey results show little impact on consumer confidence from other policy changes (including recent tax and spending bills). Inflation expectations for the next year have declined for the second consecutive month, dropping from 5.0% last month to 4.4% this month. Long-term inflation expectations have also declined for the third consecutive month, dropping from 4.0% in June to 3.6% in July. Both indices are at their lowest levels since February 2025, but still higher than December 2024, indicating that consumers still perceive a significant risk of future inflation increases.

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