US consumer sentiment hits 98.4 in July, vs. 98.5 estimate

A woman shops at a Walmart Supercenter store in Rosemead, California.
Frederic J. Brown | AFP | Getty Images

Consumer sentiment ticked slightly higher in early July, largely unchanged from June, according to data released Friday.

The University of Michigan's preliminary print on its consumer sentiment index ticked up to 98.4, from 98.2 in June. Economists polled by Refinitiv expected the preliminary read on July consumer sentiment to reach 98.5.

The report comes ahead of a highly anticipated meeting of the Federal Open Market Committee scheduled for July 30-31. Markets expect the U.S. central bank to slash its benchmark interest rate, despite signs of ongoing economic expansion.

Strong consumer data has largely held up in face of an expected "insurance rate cut," which has made it more difficult to justify policy easing.

The Federal Reserve usually does not cut interest rates when economic conditions show few signs of a recession. But Fed Chair Jerome Powell has noted that policy easing may be "appropriate" to sustain the economic recovery, especially given economic uncertainty from trade tensions.

Richard Curtin, chief economist of the University of Michigan's Survey of Consumers, wrote that consumers "appear to be more consistent with the stagflation thesis, which holds that inflation and unemployment move in the same direction."

"This thesis is more consistent with how consumers process and organize diverse bits of news about the economy," Curtin said.

That analysis comes after Powell said earlier this month that the relationship between unemployment and inflation has "gone away."