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

On Friday, the University of Michigan released the preliminary results of its Surveys of Consumers for June.

• The Index of Consumer Sentiment declined to a reading of 65.6 in June, down from 69.1 in May. This is a month-over-month decline of 5.1% but up 2.2% year-over-year (64.2 in June 2023).
• The Current Economic Conditions for June dropped to a reading of 62.5, down from 69.6 in May. This is a month-over-month decline of 10.2% and down 9.3% year-over-year (68.9 in June 2023).
• The Index of Consumer Expectations declined to a reading of 67.6 in June, down from 68.8 in May. This is a month-over-month decline of 1.7% but up 10.6% year-over-year (61.1 in June 2023).

In remarks and analysis prepared to accompany the report, Surveys of Consumers Director Joanne Hsu said:

“Consumer sentiment was little changed in June; this month’s reading was a statistically insignificant 3.5 index points below May and within the margin of error. Sentiment is currently about 31% above the trough seen in June 2022 amid the escalation in inflation. Assessments of personal finances dipped, due to modestly rising concerns over high prices as well as weakening incomes. Overall, consumers perceive few changes in the economy from May.

Year-ahead inflation expectations were unchanged this month at 3.3%, above the 2.3–3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations inched up from 3.0% last month to 3.1% 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 2.2–2.6% range seen in the two years pre-pandemic.

All of these patterns are visible when looking at trends within phone interviews alone or web interviews alone, and thus they are not artifacts of the survey’s methodological transition.”