The figures: Consumer confidence increased to a 13-month high of 66.4 in early February, indicating that Americans are cautiously optimistic about the U.S. economy as inflation declines.
The measure rose from 64.9 in January, according to the University of Michigan’s preliminary findings.
However, consumer confidence is still not that strong.
Key information A measure of consumer sentiment on their financial status and the state of the economy increased from 68.4 to 72.6 last month.
Another indicator that looked at expectations for the following six months dropped from 62.7 to 62.3, indicating a little bit more concern about the state of the economy later in the year.
They projected that the annual inflation rate would be around 4.2%. Respondents in January stated that they anticipated inflation to be 4%.
Consumers predicted that inflation will decline over time, reaching 2.9%.
Inflation expectations are closely monitored by top Fed officials because they may be a sign of future price movements.
According to the consumer price index, the inflation rate over the past 12 months has been 6.5%.
Big picture: As a significant wave of inflation ebbs, Americans are seeing some respite from high prices, particularly fuel.
However, the Fed’s plan to raise interest rates to control inflation also raises the risk of a recession.
Looking forward Despite the recent reduction in inflation, high costs still affect consumers generally, according to Joanne Hsu, the survey’s director. Consumers “are ready to exhibit increased prudence with their spending in the months ahead, along with worries over growing unemployment on the horizon.”