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US consumer sentiment fell in July

News, 01 August 2016

ANN ARBOR, MI: Consumer confidence in the US weakened in July amid concerns about prospects for the economy and global market conditions following the UK's Brexit vote.

The University of Michigan reported on Friday that its consumer sentiment index fell to 90.0 in July from 93.5 in June, which was moderately worse than projections from economists surveyed by Bloomberg and the Wall Street Journal.

Economists questioned by Bloomberg had expected an index reading of 90.2 while those surveyed by the Wall Street Journal expected a reading of 90.8 in July.

The index measuring optimism about current conditions, which includes consumers' assessment of their personal finances, fell in July to 109 from 110.8 in June, while the measure of expectations over the next six months fell to 77.8 from 82.4 last month.

Meanwhile, US consumers reported that they expected inflation to rise to 2.7% in the next year, up from 2.6% in June.

Intriguingly, a record proportion of households in the upper income bracket reported concerns about the potential impact on the economy of the UK's decision to leave the European Union.

"The Brexit vote was spontaneously mentioned by record numbers of households with incomes in the top third (23%), more than twice as frequently as among households with incomes in the bottom two-thirds (11%)," said Richard Curtin from the Survey Research Center at the University of Michigan in a press release.

"Given the prompt rebound in stock prices as well as the tiny direct impact on US trade, it is surprising that concerns about Brexit remained nearly as high in late July as immediately following the Brexit vote," he added.

Data sourced from Bloomberg, Wall Street Journal, DigitalLook; additional content by Warc staff