US consumer sentiment falls to fresh decade low amid inflation concerns

Washington, Feb 12 (IANS) US consumer sentiment fell to a fresh decade low in early February amid concerns over rising inflation, according to a survey released by the University of Michigan on Friday.
The preliminary consumer sentiment index fell to 61.7 in the first half of February, the lowest level since October 2011, from a final reading of 67.2 in January, the survey showed.
“The recent declines have been driven by weakening personal financial prospects, largely due to rising inflation, less confidence in the government’s economic policies, and the least favourable long term economic outlook in a decade,” Richard Curtin, Chief Economist of the survey, said in a statement.
“The impact of higher inflation on personal finances was spontaneously cited by one-third of all consumers, with nearly half of all consumers expecting declines in their inflation adjusted incomes during the year ahead,” Curtin added.
The decline in consumer sentiment came after the US Labor Department reported on Thursday that consumer prices in January continued to rise at the fastest annual pace in nearly 40 years, raising the prospect of a tighter monetary policy by the Federal Reserve, Xinhua news agency reported.
The Fed signaled in January that it is ready to begin a series of interest-rate hikes in March to combat surging inflation as it exits from the ultra-loose monetary policy enacted at the start of the Covid-19 pandemic.

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