U.S. consumers’ 1-year inflation outlook drops to 18-month low

(Reuters) – U.S. consumers expect price pressures to moderate notably in the next year, with a benchmark survey on Friday showing their one-year inflation outlook dropping to the lowest in 18 months in December.

The University of Michigan Surveys of Consumers said the one-year inflation outlook, released alongside its bi-monthly reading of overall consumer sentiment, fell to 4.4% this month from a final reading of 4.9% in November and from a preliminary 4.6% reading two weeks ago.

That was the lowest since June 2021 and was the half-percentage-point drop in near-term inflation expectations from November was the largest since September 2020.

At the five-year horizon, the outlook moderated to 2.9% from 3.0% last month and earlier in December.