US consumer sentiment continues to improve
The mood index rose slightly from 79 to 79.6 points. Experts had expected a greater increase.
Consumers expect the inflation rate to reach 3% for goods and services during the next twelve months.
Photo: Hannah Pierre/Bloomberg
US consumer sentiment improved slightly in February. The barometer rose from 79.0 to 79.6 points, the University of Michigan announced on Friday based on its monthly survey. Experts polled by Reuters had expected a stronger increase to 80.0 points after sentiment improved significantly at the beginning of the year. Consumers rated their situation as somewhat worse in February, but expectations were better than before.
US consumers are facing an increase in inflation, which has been gradually declining: the inflation rate fell to 3.1% in January, still well above the central bank's 2% stabilization target.
Consumer inflation expectations have now increased slightly: looking ahead to the next 12 months, they expect the inflation rate for goods and services to reach 3.0%. In January, consumers estimated 2.9%.
The Fed is trying to push inflation toward its 2% target through a tight monetary policy line. It has raised interest rates from near zero to a range of 5.25 to 5.50% since the beginning of 2022. According to Federal Reserve Chairman Jerome Powell, the central bank has made progress in combating inflation. However, before cutting interest rates, it wants to make sure that inflation is moving sustainably toward the Fed's target.
A shift in interest rates in financial markets is not expected before mid-year at the earliest. Producer prices, an early signal of developing inflation, rose more than expected at the beginning of the year. From the point of view of financial markets, this also contradicts an early interest rate cut.
Reuters
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