WASHINGTON, June 26 - U.S. consumers reported a modest improvement in overall sentiment in June, yet worries about the cost of living remained a dominant theme, according to the University of Michigan’s Surveys of Consumers.
The survey's Consumer Sentiment Index finished the month at a final reading of 49.5, up from 44.8 in May. That final figure was a slight gain from an earlier preliminary reading of 48.9 issued earlier in the month. Economists surveyed by Reuters had been expecting the index to close the month at 50.0.
Joanne Hsu, director of the Surveys of Consumers, highlighted the persistence of price pressure in consumers' minds. "The cost of living remains at the forefront of consumers’ minds," she said. "For the third straight month, over half of consumers spontaneously mentioned that high prices are weighing down their personal finances."
The survey also tracked expectations for future inflation. Consumers' one-year inflation expectations declined slightly to 4.6% in June from 4.8% in May. The report noted that the one-year expectation was unchanged from the earlier reading this month.
Looking further ahead, respondents’ inflation expectations for the next five years eased to 3.3% in June, down from 3.9% in May. The survey recorded long-term inflation expectations at 3.4% in an earlier reading this month.
Context and interpretation
The University of Michigan’s monthly readings provide a snapshot of household attitudes toward personal finances and broader economic conditions. In June, the headline improvement in the Consumer Sentiment Index signaled a modest rebound from the prior month’s lows, while commentary from the survey highlighted that a majority of consumers continue to report price-related strains on household budgets.
At the same time, the measures of expected inflation remained elevated: one-year expectations were still near 4.6%, and five-year expectations, though lower than last month, were recorded at 3.3% in the final June reading. The survey’s data show the persistence of inflation concern even as headline sentiment ticked up.
Summary
The University of Michigan’s Surveys of Consumers reported a final Consumer Sentiment Index of 49.5 for June, up from 44.8 in May and slightly above an earlier preliminary reading of 48.9. More than half of consumers continued to identify high prices as a pressure on their finances. One-year inflation expectations fell to 4.6% from 4.8%, while five-year expectations declined to 3.3% from 3.9%. Long-term expectations were 3.4% earlier in the month.