US consumer confidence slips in July amid higher prices, U.Michigan says

Americans were a bit less cheerful in July amid complaints about higher prices for homes, vehicles and household durables.

The University of Michigan's consumer confidence index fell from a level of 85.5 at the end of June to 81.2 at the end of July.

That was a tad better than the early July reading of 80.8.

Significantly, most consumers believed that faster inflation would be transitory.

But the survey's director, Richard Curtin, thought otherwise.

"There is growing evidence that an inflation storm is likely to develop on the not too distant horizon," he said in a statement.

Curtin believed actions by both companies and consumers would unleash an upward spiral in prices.

Nonetheless, unlike in the 1970s consumers weren't seeking to front run price increases.

Nowadays consumer purchases will be driven by income and job gains on theback of federal tarnsfers and physical and human infrastructure programmes.

"The beneficial reduction in income inequality will shift more money to those who have higher propensities to spend, and thus energize demand.

"The booms will end in the same way as usual: rising prices will eventually outdistance wage gains, lowering living standards, and cause an economy-wide retrenchment in spending."