The latest University of Michigan’s Consumer Sentiment Survey released on June 14 details consumer sentiment hitting its lowest level in seven months in June, attributing the decline to anxiety over inflation.
The monthly sentiment data came in at 65.6 percent, down from a final reading of 69.1 percent in May and marking the third straight monthly decline.
Economists polled by Bloomberg had expected a reading of 72 percent; however, they attributed the University of Michigan’s transition to its web-based interviewing process using telephone surveys as part of the continued decline in consumer sentiment.
The last time the University of Michigan reported consumer sentiment to be this low was in November 2023.
University of Michigan Survey Director Joanne Hsu stated, “While consumer sentiment declined this month, the 3.5 Index point dip is relatively minor in the grand scheme. That decline is within the margin of error for the survey.
“Sentiment is currently about 31 percent above the trough seen in June 2022 amid the escalation in inflation,” continued Hsu. “Assessments of personal finances dipped due to modestly rising concerns over high prices and weakening incomes. Overall, consumers have perceived a few changes in the economy since May.”
Hsu added, “Year-ahead inflation expectations were unchanged this month at 3.3 percent, above the 2.3 percent to 3.0 percent range seen in the two years prior to the pandemic. Long-run inflation expectations inched up from 3.0 percent last month to 3.1 percent this month; the June reading should be interpreted as essentially unchanged from May. Long-run inflation expectations have been remarkably stable over the last three years but remain elevated relative to the 2.2 percent to 2.6 percent range seen in the two years pre-pandemic.”
