The University of Michigan Index of Consumer Sentiment fell 3 points in July to 93.1, but remains well above year-ago levels. A weaker outlook on the economy was responsible for most of the monthly decline.
Broader Trend Still Up Despite Monthly Loss
- The notably volatile Consumer Sentiment Index slipped three points in July, but the year-to-year trend remains positive.
- Each of the seven major sub-indices was lower in the month, as news headlines eroded confidence in the economy’s near term prospects. Troubles in China and Greece as well as more volatility in oil prices seemed to have negatively impacted consumers’ view of the future economy.
Longer Run Expectations Hold Up Better
- Short-term expectations on the economy performed the worst in July, with the index plummeting 10 points to its second lowest reading this year. This drop is consistent with other reports.
- The longer-run economic outlook over five years, however, only slipped 3 points, suggesting that the negative impact of recent events will be short-lived. Either way, relatively few consumers seem to think such events will hit their personal finances.
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