US consumer confidence increased slightly in July, surprising economists who had forecast another decline as inflation continues to rage after sentiment reached the lowest point on record in June.
The University of Michigan’s consumer sentiment index released Friday rose to 51.1 this month, up from a record low of 50 in June. Economists polled by Refinitiv had expected a July reading of 49.9. For perspective, the index was at 81.2 a year ago.
“Consumer sentiment was relatively unchanged, remaining near all-time lows,” Joanne Hsu, director of the survey, said in a statement released with the report. “Current assessments of personal finances continued to deteriorate, reaching its lowest point since 2011.”
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“Consumers remained in agreement over the deleterious effect of prices on their personal finances,” Hsu noted. “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. These negative views endured in the face of the recent moderation in gas prices at the pump.”
Inflation reached a new 40-year high of 9.1% in June, and the persistence of price increases continues to pummel Americans’ budgets.
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Retail sales also rose last month, in part propelled by increased spending on gas, which hit a record high topping $5 mid-month. Prices have since subsided and average around $4.58, according to AAA.
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“Consumers are continuing to absorb higher prices in non-discretionary categories like gas, and deferring purchases in categories like appliances,” said Claire Tassin, a retail and e-commerce analyst at Morning Consult. “Declines in apparel and department store spending indicate that consumers are tightening their belts in some areas as they manage through this difficult period.”
FOX Business’ Megan Henney contributed to this report.