University of Michigan Reports Final Results of its Consumer Sentiment Index for June 2023

The University of Michigan on Friday (6-30-23), released the final results of its Consumer Sentiment Index (CSI) for June. The Index of Consumer Sentiment fell to a rose to a reading of 64.4 in June, up from its reading of 59.2 in May. A month-over-month increase of 8.8%, and up 28.8% year-over-year (50.0 in June 2022). The Current Economic Conditions increased to a reading of 69.0, up from its reading of 64.9 in May. A month-over-month improvement of 6.3%, and up 28.3% year-over-year (53.8 in June 2022). Finally, the Index of Consumer Expectations climbed to a reading of 61.5 in June, up from its reading of 55.4 in May. A month-over-month increase of 11.0% and up 29.5% year-over-year (47.5 in June 2022).

In remarks and expert analysis prepared to accompany the release of the Final January 2023 Consumer Sentiment Index, Dr. Joanne Hsu Ph.D., Director of Surveys for the UofM said, Consumer sentiment rose 9% this month, a consensus improvement across all demographic groups. The year-ahead economic outlook soared 28% over last month, and long run expectations rose 11% as well. Overall, this striking upswing reflects a recovery in attitudes generated by the early-month resolution of the debt ceiling crisis, along with more positive feeling over softening inflation. Views of their own personal financial situation were unchanged, however, as persistent high prices and expenses continued to weight on consumers.

Dr. Hsu continued, Year-ahead inflation expectations receded for the second consecutive month, falling to 3.3% in June from 4.2% in May. The current reading is the lowest since March 2021. Long-run inflation expectations were little changed from May at 3.0%, again staying with the narrow range of 2.9% – 3.1% range for 22 of the last 23 months. These expectations remained elevated relative to the 2.2% – 2.6% range seen in the two-year pre-pandemic.