US Consumer Sentiment Rises Amid Optimistic Economic Reopening
US consumer sentiment jumped by more than expected at the beginning of June, as an increased number of Americans expect economic conditions to continue improving.
The latest University of Michigan preliminary sentiment index reading rose from 82.9 in May to 86.4, which is above the consensus forecast among economists polled by Bloomberg calling for a reading of 84.2. “Stronger growth in the national economy was anticipated, with an all-time record number of consumers anticipating a net decline in unemployment,” explained the survey’s director, Richard Curtin.
Consumers are now anticipating that inflation will jump 4% over the next twelve months, marking a decline from May’s expectation of an inflation rate of 4.6%. Over the next five years, respondents are foreseeing price pressures to taper off, rising by only 2.8% instead of the 3% previously expected.
Consumers have become more optimistic regarding economic expectations, particularly as public health restrictions lift and vaccination levels continue to rise. At the same time, Americans are beginning to increasingly engage in social activities with expectations to travel over the summer months.
However, despite the more optimistic inflation forecasts, the share of respondents reporting elevated housing prices soared to a record-high in June, while reports of higher household durable and vehicle costs also reached the highest since 1981. Indeed, inflation levels have been surging over the past several months, repeatedly exceeding consensus forecasts. Thursday’s report from the Bureau of Labour Statistics showed CPI rose 5%, the highest since August 2008.
Information for this briefing was found via the University of Michigan and the BLS. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.