Most consumers expect higher inflation and anticipate that interest rates will rise in the next 12 months, The Conference Board said.
Most consumers expect higher inflation and anticipate that interest rates will rise in the next 12 months, The Conference Board said.
The yield on the 10-year Treasury note — the benchmark for mortgages and other consumer loans — has increased from 4.19% at the start of this year to 4.64% on Tuesday.
Borrowing costs have risen because of concerns about inflation and the U.S.-Iran conflict, the worsening U.S. fiscal outlook and a surge of borrowing among companies building the infrastructure for artificial intelligence.
“Consumer confidence for Americans earning $75,000 or less is falling,” Long said.
“While it’s always worse for lower-income households, the trend has been clear since the war in Iran began,” she said, noting a “divide between high earners and more moderate earners.”
Consumer sentiment fell 8% this month after two straight months of improvement, according to Joanne Hsu, director for surveys of consumers at the University of Michigan.
“Although the early-month weakening in sentiment was pervasive across various demographic groups, notably large reductions were seen among older consumers, lower-income consumers and those without a college degree,” Hsu said.
“These groups are all particularly vulnerable to any erosion of purchasing power stemming from inflation,” she said, reporting on preliminary data for August. The university on Friday plans to release its final findings for August.
S. households saved no money last month, EY-Parthenon found in a recent survey, highlighting how the rising price for gasoline and other goods is undermining consumers’ buying power.
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