Michigan Consumer Sentiment Reached Yearly Highs In July

Key Insights

• Michigan Consumer Sentiment increased from 64.4 in June to 72.6 in July. 
• Current Economic Conditions grew from 69.0 to 77.5.
• Index of Consumer Expectations improved from 61.5 to 69.4.

On July 14, the University of Michigan released preliminary Michigan Consumer Sentiment report for July. The report indicated that Consumer Sentiment improved from 64.4 in June to 72.6 in July, compared to analyst consensus of 65.5.

Current Economic Conditions increased from 69.0 to 77.5, while Index of Consumer Expectations grew from 61.5 to 69.4.

The University of Michigan commented: “The sharp rise in sentiment was largely attributable to the continued slowdown in inflation along with stability in labor markets.”

The report showed that Consumer Sentiment increased to yearly highs despite Fed’s rate hikes. Treasury yields moved higher after the release of the report as rising Consumer Confidence provides Fed with an opportunity to be more hawkish to fight inflation.

U.S. Dollar Index rebounded towards the 100 level as traders reacted to the Consumer Sentiment report. It should be noted that U.S. Dollar Index was oversold, so rising Consumer Confidence may serve as a material positive catalyst for the American currency.

Gold pulled back towards the $1950 level as traders focused on rising Treasury yields and U.S. dollar’s rebound.

SP500  settled near yearly highs at 4527 as traders cheered the better-than-expected report. Consumer activity is extremely important for the U.S. economy, so traders bet that companies’ profits would grow as consumers spend more money.

For a look at all of today’s economic events, check out our economic calendar.