The consumer sentiment barometer dropped to 68.8 in January from 70.6 in December, the University of Michigan said in its monthly survey on Friday. Economists surveyed by Reuters expected a slight decline to 70.0 points. Consumers have badly assessed both the situation and the opportunities in the coming months.
Over the next twelve months, citizens expect prices of goods and services to rise by 4.9 percent. Consumer prices have risen at a recent pace, and Americans can see it every day on gas pump and supermarket shelves.
Inflation hit 7.0 percent in December – the highest level since June 1982. According to survey chief Richard Curt, three-quarters of consumers see inflation as a more serious problem than unemployment. The high cost and prevalence of the Delta and Omigron virus variants both affected the mood.
Federal Reserve Chairman Jerome Powell recently signaled that the central bank would soon abandon its more loose monetary policy in view of high inflation. Financial markets are expected to see four interest rate hikes in the current year.
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