19/07/2019 Surveys of Consumers

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Preliminary Results for July 2019 Featured Chart (PDF or Excel)

Jul Jun Jul M-M Y-Y
2019 2019 2018 Change Change
Index of Consumer Sentiment 98.4 98.2 97.9 +0.2% +0.5%
Current Economic Conditions 111.1 111.9 114.4 -0.7% -2.9%
Index of Consumer 90.1 89.3 87.3 +0.9% +3.2%
Expectations

Next data release: Friday, August 02, 2019 for Final July data at 10am ET

Surveys of Consumers chief economist, Richard Curtin

Consumer sentiment remained largely unchanged in early July from June, remaining at
quite favorable levels since the start of 2017. Moreover, the variations in Sentiment
Index have been remarkably small, ranging from 91.2 to 101.4 in the past 30 months.
Perhaps the most interesting change in the July survey was in in ation expectations, with
the year-ahead rate slightly lower and the longer term rate moving to the top of the
narrow range it has traveled in the past few years. Given the heightened interest in Fed
policy, it is of some interest to examine the relationship between consumers’ in ation
expectations and the anticipated strength in the economy as well as prospective shifts in
interest rates and unemployment. In ation expectations were divided into three groups
based on responses to the January to July 2019 surveys: those who expected a year-
ahead in ation rate less than or equal to 0%, an in ation rate of 1% to 3%, and those
who expected an in ation rate equal to or greater than 4% (see the chart). The
Consumer Expectations Index falls as in ation expectations rise, signifying that
consumers view higher in ation as a threat to economic growth. Higher in ation was
related more frequently to rising interest rates and was associated with higher
unemployment expectations. While the in ation-unemployment relationship is in the Video | Order from Amazon
opposite direction of the Phillips curve hypothesis, that relationship is usually based on
wage in ation, not overall in ation. Consumers’ views appear to be more consistent with
the stag ation thesis, which holds that in ation and unemployment move in the same
direction. This thesis is more consistent with how consumers process and organize
diverse bits of news about the economy.

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