Consumer Sentiment Falls as Prices Continue to Rise
According to the National Association of Manufacturers’ (NAM) Monday Economic Report for this week, the Index of Consumer Sentiment declined from 67.2 in January to 61.7 in February, the lowest reading since October 2011. Americans felt more pessimistic about both current and future economic conditions, on inflation worries. The statement also noted, “Importantly, the entire February decline was among households with incomes of $100,000 or more; their Sentiment Index fell by 16.1% from last month and 27.5% from last year.”
Consumer prices rose 0.6% in January, matching the pace in December and continuing to increase. Food and energy prices both soared 0.9% in January. Excluding food and energy, core consumer prices increased 0.6% in January, also matching the rate in December.
The consumer price index has risen 7.5% over the past 12 months, up from 7.1% in December and the fastest YoY pace since February 1982. Core inflation (which excludes food and energy) increased 6.0% YoY in January, up from 5.5% in the prior release and the biggest increase since August 1982.
Consumer prices are predicted to continue growing by more than consumers have become accustomed to in recent years, with core consumer inflation rising around 3.5% YoY by the end of 2022.