Strategy in TECH...
This past Friday, the University of Michigan released a preliminary reading of its Index of Consumer Sentiment for the month of August. This survey, one of the more widely followed readings by economists on how consumers are feeling, showed a small but meaningful jump as consumers are feeling a little better about the future. However, the overall results were a bit mixed.
Things are changing in the economy faster now, causing a dramatic uptick in economic anxiety. The fuse was lit last Friday when the latest government data showed that inflation increased to 8.6% in May compared to last year. The reading on inflation had been widely expected by most economists to drop a point or two from the 8.3% rate of inflation reported in April. The news sent Wall Street into a tailspin as traders interpreted the increase in inflation as a heightened risk of recession.
For three straight months now, consumer sentiment has declined as the world faces war in Europe, soaring global gas prices, price inflation on a wide range of consumer goods, and lingering supply chain issues. As measured by the widely followed University of Michigan Index of Consumer Sentiment released earlier this month, the index is nearing its lowest level in 11-years.
In spite of the fact that the economy is continuing to grow as it powers away from the days of COVID shutdowns, a preliminary November reading of consumer sentiment shows a dramatic drop to a 10-year low, as consumers fret about growing inflation. While economists have long warned that transitory inflation would be a temporary part of our overall economic recovery, consumers are clearly concerned that this inflation may be hanging around for a while and it is already crimping their lifestyle.
