Consumer sentiment continued to waver in June, as economic signs gave little hope for inflation relief in the near future.
Consumer sentiment fell 1.3% in June, from 69.1 in May to 68.2, according to the University of Michigan’s latest report. This is the fourth straight month of decreases, with a 0.5% decrease in March, a 1.9% fall in April and an astounding 10.5% drop in May—the lowest reported reading in five months.
2024 had originally started out strong for consumers, with a large leap in sentiment back in January and another increase in February. However, as economic signs have either declined or remained stagnant, consumers have increasingly lowered their sentiments throughout the year.
Joanne Hsu, director of the Surveys of Consumers, however, explained that June’s reading may be within the margin of error and not actually cause for further concern. Especially since sentiment is up 6.2% year-over-year.
“While consumers exhibited confidence that inflation will continue to moderate, many expressed concerns about the effect of high prices and weakening incomes on their personal finances,” said Hsu. “These trends offset the improvements in the short- and long-run outlook for business conditions stemming in part from expectations for softening interest rates. Still, sentiment is currently about 36% above the trough seen in June 2022.”
Year-ahead inflation expectations fell from 3.3% last month to 3% this month, now just inside the 2.3% – 3% range seen in the two years prior to the pandemic. Long-run inflation expectations came in at 3% for the third consecutive month, still somewhat elevated relative to the 2.2% – 2.6% range seen in the two years pre-pandemic.
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