The U-Mich consumer sentiment surged, but long-term inflation remains a challengeđ€
U-Mich consumer sentiment jumped to 72.6, the highest levels since September 2021, led by a surge in current conditions (77.5 vs 69 prior) and a slight drop in 1-year inflation expectations (3.4% vs 3.3% prior), matching the lowest levels seen since early 2021. The drop in near-term expectations matches the softening seen in recent hard inflation data, where the % of CPI categories showing increasing YoY growth is at the lowest levels since 2009. However, the only wrinkle in the release was the rebound in long-term inflation expectations back to 3.1%, matching a 12-year high going back to 2010. It appears that the battle to take long inflation in the long-run is going to take quite a while longer.
