Consumer sentiment survey out this morning, with all eyes on inflation outlook
The University of Michigan consumer sentiment survey for August will be out at 10 a.m., and investors will be watching the inflation component with particular interest.
Economists surveyed by Dow Jones expect the survey to register a 52.5 reading, a slight improvement from July’s 51.1 and just off the historic low 50 hit in June.
That June reading turned out to be especially significant not just for the top-line measure but also because it showed a tick higher in inflation expectations. Respondents put their one-year outlook at 5.3% but raised the five-year forecast 0.3 percentage point to 3.3% (later revised to 3.1%).
The combination of record-low sentiment and heightened inflation fears prompted the Federal Reserve to signal an 11th-hour switch from a telegraphed 0.5 percentage point interest rate hike to a 0.75 percentage point move.
July’s survey saw a decline in the 5-year outlook to 2.9%, but the Fed raised another three-quarters of a point anyway. Consumer sentiment surveys are often tied closely to gas prices, which fell sharply over the past month or so.
—Jeff Cox
Where the rally stands
Nearly two months removed from June lows, the three major averages have made big strides but still remain well below their record highs.
Here’s where each stands entering Friday:
The Dow is:
- 9.8% off its record high
- 11.5% off its June low
The S&P 500 is:
- 12.7% off its record high
- 14.7% off its June low
The Nasdaq…
