Michigan Survey Shows Inflation Hitting Consumer Sentiment

From the UMichigan January consumer survey writeup - the bigger-than-expected decline in consumer sentiment, as well as current conditions and expectations, was largely about inflation:

• "While the Delta and Omicron variants certainly contributed to this downward shift, the decline was also due to an escalating inflation rate. Three-quarters of consumers in early January ranked inflation, compared with unemployment, as the more serious problem facing the nation."
• "When asked to assess their finances, 33% reported being worse off financially than a year earlier, just above the April 2020 shutdown low of 32%, the worst reading since 2014."
• Inflationary erosion of living standards was the main explanation offered by these consumers....Nearly half of all consumers (48%) anticipated that the inflation rate would outdistance income increases to produce real income declines. Just 17% anticipated real income gains in 2022."
• The 3.1% long-term inflation expectation in the survey was the highest since 2011.