When it comes to the U.S. economy, households are feeling a little less confident than has been seen previously. The University of Michigan’s readings posted on Friday (May 25) showed a dip from a 14-year peak touched this year.
The Wall Street Journal noted that the latest reading came in at 98, which is down from an initial May reading of 98.8, and which would have been unchanged from April. The economists that offered up a consensus of 98.8 said March was the zenith, at 101.4.
Still, the results are relatively high amid an economy that has been marked by low employment and, generally speaking, despite volatility, a “wealth effect” buoyed in part by stock market gains.
The survey’s Chief Economist Richard Curtin said, “Consumers have remained focused on expected gains in jobs and incomes as well as anticipated increases in interest rates and inflation during the year ahead.” Those surveyed in the latest report state they expect the unemployment rate should stand at around 3.9 percent, which would be the lowest level seen in 18 years.
Expectations for inflation have been on the upswing, as measured in May, at a rate of 2.8 percent, where last year that rate had been forecast at 2.7 percent — up from 2.5 percent seen in each of the previous five months.
The Wall Street Journal also noted that the personal consumption expenditures price index, which is billed as the “Federal Reserve’s preferred inflation gauge,” was up 2 percent in March from 2017 and stands at the Fed’s inflation target. In addition, “coupled with higher interest rates, it is likely that the pace of growth in personal consumption will remain at about 2.6 percent during the year ahead,” Curtin said.