Consumer sentiment rose in early June as lower gas prices and easing inflation led to less dour views of current conditions and the future.
The University of Michigan’s preliminary June index of consumer sentiment rose 9.2 percent to 48.9 from 44.8, the first improvement in four months. This was better than expected but still low by historical standards.
The improvement came in both the measure of household views of current economic conditions and the outlook.
“This month, consumer sentiment ticked up about four index points, or 9 percent, with consumers experiencing some relief due to the early-month easing in gasoline prices,” said Joanne Hsu, the director of the survey. “This measured improvement in sentiment was widespread, seen across age, education, and political party.”
The improvement was particularly strong among lower-income households, Hsu said, pointing out that this is consistent with the fact that such households spend a larger part of their budget on gasoline.
Inflation views moderated. The year-ahead inflation expected dipped to 4.6 percent from 4.8 percent in May. The longer run expectation fell to 3.4 percent from 3.9 percent.
This week, the government reported that the monthly pace of core inflation was 0.2 percent, half of the April rate.
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