Key Advisors Wealth Management co-founder and CEO Eddie Ghabour discusses the state of the consumer ahead of the 2023 holiday shopping season on 'Varney & Co.'
Inflation may be decreasing in the U.S., but Americans expect it to surge again, according to fresh data.
The University of Michigan's latest consumer survey released Wednesday found consumer sentiment fell for the fourth month in a row in November, while households' inflation expectations climbed for the second straight reading.
The U.S. consumer price index showed prices rose 3.2% annually in October, well below the mid-2022 peak but still above the Federal Reserve's 2% target. (Joe Raedle/Getty Images / Getty Images)
According to the findings, consumers see inflation accelerating to 4.5% over the next year, up from 4.2% in October and 3.2% in September.
Over a five-year horizon, consumers now see inflation running at 3.2% on average, up from 3.0% in October and 2.8% in September. That is the highest since a matching reading of 3.2% in 2011. Households' long-term inflation outlook has not been higher than that since 2008, when it reached 3.4% as the financial crisis was beginning to unfold.
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«These expectations have risen in spite of the fact that consumers have taken note of the continued slowdown in inflation,» Joanne Hsu, director of the survey, said in a statement. «Consumers appear worried that the softening of inflation could reverse in the months and years ahead.»
After several months of elevated inflation, consumers increasingly fear it will rise again. (Jessica Christian/The San Francisco Chronicle via Getty Images / Getty Images)
The Labor Department reported last week
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