Recent data indicates a modest but significant improvement in consumer sentiment regarding the U.S. economy. According to the Federal Reserve Bank of New York’s latest report, Americans are becoming more optimistic about inflation in the short, medium, and long term. Inflation expectations dropped across various time horizons: 0.4 percentage points lower for one year (to 3.2%), 0.2 points lower for three years (to 3%), and 0.1 points lower for five years (to 2.6%). This trend spans different socioeconomic and demographic groups, suggesting a widespread shift in public perception. Uncertainty about inflation decreased in the short term but remained stable in the medium and long term. Kevin Hassett, director of the National Economic Council, noted that inflation has fallen more than in the past four years, regardless of measurement. Rising tariff revenues have coincided with falling inflation, challenging narratives linking tariffs to inflation spikes. Consumers also expect slower price increases in categories like gasoline (down 0.8 points to 2.7%), healthcare (down 1.3 points to 7.4%), and university education (down 1.6 points to 7.5%). However, food price expectations rose slightly. On employment, expectations improved, with anticipated wage growth rising 0.2 points to 2.7% and confidence in finding new jobs increasing to 50.7%. These trends suggest stabilization and gradual recovery in consumer confidence, though challenges remain.
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