US long-term inflation expectations at 12-year high

Consumer confidence in the U.S. continued to decline in November, falling to its lowest level in 6 months. Long-term inflation expectations rose to a 12-year high amid concerns about the economy, with U.S. consumers’ long-term inflation expectations reaching their highest level since 2011 in November. High interest rates and concerns about the economic outlook contributed to this rise. Consumers expect annual inflation to rise to 3.2 percent in 5 to 10 years, up from 3 percent in the previous month’s survey. Inflation expectations for the coming year also rose from 4.2 percent to 4.4 percent. The University of Michigan Consumer Confidence index fell to 60.4 in November. This was recorded as the lowest level in 6 months. The expectations index fell from 59.3 to 56.9, while the current conditions index fell from 70.6 to 65.7. Persistent inflation expectations and high borrowing costs, along with weaker employment, do not support expectations for stronger consumer spending and economic growth, according to survey director Joanne Hsu. The country’s unemployment rate had risen to its highest level since 2022, according to the latest data.