University of Michigan Reports Preliminary Results of Its Consumer Sentiment Index for June

The University of Michigan on Friday (6-16-23) released the preliminary results of its Consumer Sentiment Index (CSI) for June:

• The Index of Consumer Sentiment rose to a reading of 63.9 in June, up from 59.2 in May. This is a month-over-month increase of 7.9% and up 27.8% year-over-year (50.0 in June 2022).
• The Current Economic Conditions increased to a reading of 68.0, up from 64.9 in May. This is a month-over-month improvement of 4.8% and up 26.4% year-over-year (53.8 in June 2022).
• The Index of Consumer Expectations climbed to a reading of 61.3 in June, up from 55.4 in May. This is a month-over-month increase of 10.6% and up 29.1% year-over-year (47.5 in June 2022).

In remarks and analysis prepared to accompany the report, Dr. Joanne Hsu, Director of Surveys for the University of Michigan, said:

“Consumer sentiment lifted 8% in June, reaching its highest level in four months, reflecting greater optimism as inflation eased and policymakers resolved the debt ceiling crisis. The outlook over the economy surged 28% over the short run and 14% over the long run. Sentiment is now 28% above the historic low from a year ago and may be resuming its upward trajectory since then. As it stands, though, sentiment remains low by historical standards as income expectations softened. A majority of consumers still expect difficult times in the economy over the next year.

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. In contrast, long-run inflation expectations were little changed from May at 3.0%, again staying within the narrow 2.9–3.1% range for 22 of the last 23 months. Long-run inflation expectations remained elevated relative to the 2.2–2.6% range seen in the two years pre-pandemic.”