On Friday (6-10-22), the University of Michigan released its Preliminary Consumer Sentiment Index (CSI) for June. The Index of Consumer Sentiment dropped to a reading of 50.2 in June, down from May’s reading of 58.4, This is a month-over-month decrease of -14.0% and down -41.3% year-over-year (85.5 in June 2021).
The Current Economic Conditions fell to a reading of 55.4 in June, down from 63.3 in May. This is a month-over-month decrease of -12.5% and down -37.5% year-over-year (88.6 in June 2021).
Finally, the Index of Consumer Expectations declined to a reading of 46.8 in June, down from 55.2 in May. This is a month-over-month decrease of -15.2% and down -44.0% year-over-year (83.5 in June 2021).
In remarks and analysis prepared to accompany the release of the preliminary June CSI, Joanne Hsu, Director of Surveys for the University of Michigan, said:
“Consumer sentiment declined by 14% from May, continuing a downward trend over the last year and reaching its lowest recorded value, comparable to the trough reached in the middle of the 1980 recession. All components of the sentiment index fell this month, with the steepest decline in the year-ahead outlook in business conditions, down 24% from May.
Consumers’ assessments of their personal financial situation worsened about 20%. Forty-six percent of consumers attributed their negative views to inflation, up from 38% in May; this share has only been exceeded once since 1981, during the Great Recession. Overall, gas prices weighed heavily on consumers, which was no surprise given the 65-cent increase in national gas prices from last month (AAA). Half of all consumers spontaneously mentioned gas during their interviews, compared with 30% in May and only 13% a year ago. Consumers expect gas prices to continue to rise a median of 25 cents over the next year, more than double the May reading and the second highest since 2015. In addition, a majority of consumers spontaneously mentioned supply shortages for the ninth consecutive month.”
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