Consumer sentiment in the US improved, reflecting the effect of rising expectations for a ceasefire agreement just before the renewed military conflict between the US and Iran.
The University of Michigan said on the 17th that its preliminary US consumer sentiment index stood at 54.4 for July, up 4.9 points from 49.5 in June. This marks the highest level in five months since February's 56.6. The reading also significantly exceeded the expert forecast of 50.5 compiled by Dow Jones. The US consumer sentiment index had deteriorated in the aftermath of the war between the US and Iran that began on February 28 and the surge in international oil prices.
In detail, the current economic conditions index improved to 54.9 in July from 47.7 in June. The consumer expectations index rose to 54.0 from 50.7 over the same period. Meanwhile, US consumers' one-year inflation expectations fell to 4.2% this month from 4.6% in June. Five-year inflation expectations, which reflect consumers' long-term inflation outlook, remained at 3.3%, unchanged from June.
However, this survey was conducted from the 23rd of last month to the 13th of this month, reflecting conditions more than 70% before the US and Iran resumed military conflict. The US has continued airstrikes since the 7th of this month in retaliation for Iran's attacks on ships in the Strait of Hormuz.
Joanne Hsu, director in charge of compiling the University of Michigan's consumer sentiment index, said, "If the recent decline in oil prices reverses, the upward momentum in the sentiment index may be difficult to sustain."
