WASHINGTON (MNI) – The final reading of U.S. consumer sentiment
fell in July, and was the lowest reading since March 2009, according to
the Reuters/University of Michigan Consumer Sentiment survey released
Friday.
The index came in at 63.7 — below median expectations of 64.0 —
vs. the initial reading of 63.8 reported July 15. The consumer sentiment
index was 71.5 in June and 74.3 in May.
The index’s final reading for consumers’ view of current conditions
in July was reported at 75.8, down from the preliminary reading of 76.3,
and the lowest reading since November 2009. The index was 79.6 in June,
and 81.9 in May.
Meanwhile the final gauge of consumers’ expectations climbed up to
56.0 from 55.8 initially, and after 64.8 was reported for June and 69.5
in May.
Consumers’ final 1-year inflation expectations for July was 3.4%,
unchanged from the preliminary expectation of 3.4%. This compared with
the 3.8% expectation reported for June. Final five-year inflation
expectations rose to 2.9% vs. 3.0% last month.
The downturn in consumer sentiment comes as economic growth was
anemic in the first half of the year and the unemployment rate remains
high. The latest U.S. GDP data and revisions show a stunningly weak
first half, with Q2 real GDP estimated at +1.3% and Q1 revised down to a
mere +0.4%.
And the drawn-out impasse on Capitol Hill over raising the debt
ceiling and avoiding a U.S. default continues to batter consumer
confidence. House Speaker John Boehner Thursday night cancelled a vote
on the debt bill he crafted, after it became apparent he would not be
able to guarantee the enough votes among his caucus.
As MNI reported earlier, Boehner appears to have two options:
revise his bill yet again and likely delay the House vote until Saturday
or to redouble efforts to secure the needed 216 votes to pass it.
** Market News International Washington Bureau: 202-371-2121 **
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