Consumer sentiment grew to 8% in June, the highest level in four months, according to data from the University of Michigan.
The report found that sentiment is now 28% above the historic low from a year ago, but continues to remain historically lower. The outlook over the economy grew 28% over the short run and 14% over the long run.
Inflation expectations for the future, meaning the year-ahead, fell for the second month in a row to 3.3% in June. This reading is the lowest level since March 2021. On the other hand, long-run inflation expectations were little changed from May at 3.%, again staying within the 2.9-3.1% range for the 22nd month.
This data comes in the wake of both inflation reportedly slowing and the Federal Reserve announcing a pause in rates.
The latest Consumer Price Index (CPI) released on Tuesday came in at 4%, the lowest registered level in two years. Experts responded that this reading pointed to a critical decision from the Fed: a pause in their rate hikes.
As of the Fed meeting on Wednesday, the predictions came true. The Fed announced a pause in the interest rate hike campaign that began over a year ago.
“We have been seeing the effects of our policy tightening on demand in the most interest rate sensitive sectors in the economy, especially housing and investment,” said Fed Chair Jerome Powell. “It will take time, however, for the full effects of monetary restraint to be realized, especially on inflation.”
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