US consumers’ near-term inflation expectation lowest since 2020

The overall sentiment index edged up to 67.9 in August from July’s eight-month low of 66.4, snapping a four-month slide. The increase largely came from self-described political independents, Joanne Hsu, the director of the University of Michigan’s Surveys of Consumers, said in a statement.

“Sentiment this month reflects a slight rise in sentiment among independents, as Democrats and Republicans offset each other almost perfectly,” Hsu said. “Democrats exhibited a large 10 per cent increase in sentiment while Republicans posted an equally sized decline.”

Hsu said the patterns reflect a “sea change” in election expectations this month, with Vice-President Kamala Harris taking over as the Democratic presidential candidate after President Joe Biden bowed out of the race.

In July, University of Michigan data showed 51 per cent of consumers expected Republican nominee Donald Trump to win the election, versus 37 per cent for Biden, Hsu said. That has since flipped and now 36 per cent of consumers expect Trump to win compared with 54 per cent for Harris.