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Americans are feeling slightly better about the economy, but inflation still bites

Americans are feeling slightly better about the economy, but inflation still bites



'Worse than we anticipated:' CNN reporter breaks down inflation dataReplayMore Videos ... (15 Videos)'Worse than we anticipated:' CNN reporter breaks down inflation dataAmid inflation, economist warns avoiding recession won't be 'easy path'What can Biden actually do about inflation? History is a guideLook back at when the euro hit parity with the dollar in 2002'America's job machine is firing on all cylinders': Romans on the June jobs reportRecession is likely coming. How bad will it be?Child care costs are rising. See how parents are copingCiti chief economist: Recession risk is risingSchwab top strategist: Consumers 'much better prepared' for downturn compared to Great Recession'Pay rent or buy some food': Millions of renters unsure if they can make rentShrinking UK economy could lead to a recession amid 40-year high inflationPowell: Recession after rate hikes certainly a possibilityWarren to Powell: Don't drive this economy off a cliffAnalyst: Gas tax holiday 'won't change people's behavior'Gary Cohn: Fed was late on interest rate hikes (CNN)Americans are feeling slightly better about the economy, but painfully high inflation is still keeping consumer sentiment at close to an all-time low, according to preliminary survey data released by the University of Michigan on Friday.

The preliminary index for the university's Surveys of Consumers rose to 51.1 in July from the record low of 50 posted in June."The share of consumers blaming inflation for eroding their living standards continued its rise to 49%, matching the all-time high reached during the Great Recession," said Joanne Hsu, Surveys of Consumers director, in a statement. "These negative views endured in the face of the recent moderation in gas prices at the pump."The survey also showed that expectations for long-term inflation continue to improve. Median expectations for inflation levels five years from now dropped to 2.8%, which lands below the range of 2.9% to 3.1% seen during the past 11 months.How does inflation affect my standard of living?The consumer sentiment data follows the release of new retail sales figures, which showed a slight pullback in spending as Americans battle high prices on everything from cookies to clothing. Economists and policymakers are closely watching for any substantial dip in US consumer spending, which drives almost two-thirds of the economy. Read MoreRetail sales grew 1% in June from May to $680.6 billion and were up 8.4% from June 2021, according to data released earlier Friday by the US Census Bureau.However, since retail sales figures are not adjusted for inflation, the higher number likely reflects higher prices as opposed to more spending. Inflation, as measured by the Consumer Price Index, surged by 1.3% last month and is up 9.1% from last June.The survey results are part of an economic data set that is carefully monitored by the Federal Reserve, which is in the throes of trying to rein in the highest inflation in 40 years.While some analysts and economists previously expected the Fed to raise its benchmark rate by 75 basis points when it meets at the end of the month to discuss monetary policy, a recent slew of robust economic data has markets preparing for more aggressive action from the Fed -- including a potential rate hike of 100 basis points -- to cool consumer demand.This story is developing and will be updated.


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