U.S. Consumer Sentiment Rises in Early June; Inflation Expectations Ease -- University of Michigan
11 June 2021 - 3:45PM
Dow Jones News
By Xavier Fontdegloria
Consumer sentiment in the U.S. rose in early June, reversing
part of the fall registered in May, amid an improvement of the
short-term outlook and easing inflation expectations.
The preliminary estimate of the index of consumer sentiment
released Friday by the University of Michigan came in at 86.4 in
June, up from 82.9 in May. The reading is above expectations from
economists polled by The Wall Street Journal, who forecast the
indicator to increase to 84.4.
The early June gain was mainly among middle and upper income
households and for future economic prospects rather than current
conditions, said Richard Curtin, the survey's chief economist.
Rising inflation remained a top concern of consumers, although
the expected rate of inflation declined in early June, he said.
Americans' expected inflation rate eased somewhat in June. For
the next year, consumers expect prices to increase 4% compared with
a 4.6% in May. For the next five years, inflation is expected to
rise by 2.8%, down from 3% the prior month.
June's rise in consumer sentiment slightly offsets the losses
registered in May, when soaring inflation expectations dented
consumers' mood. The indicator is far from February's 2020's
pre-pandemic level of 101.0, but the reading should improve as job
growth accelerates, economists say.
Consumers' assessment of the current economic conditions
increased slightly to 90.6 in June from 89.4 in May. The index of
consumer expectations--which reflects the balance of respondents
anticipating improved business conditions in the next six
months--rose to 83.8 from 78.8 the previous month.
Stronger growth in the national economy was anticipated, with an
all-time record number of consumers anticipating a net decline in
unemployment, Mr. Curtin said.
Despite the decline in inflation expectations, spontaneous
references to market prices for homes, vehicles and household
durables fell to their worst level since the all-time record in
November 1974, he said.
The survey was conducted between May 26 and June 9. The final
reading for the month will be published on June 25.
Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com
-0-
(END) Dow Jones Newswires
June 11, 2021 10:32 ET (14:32 GMT)
Copyright (c) 2021 Dow Jones & Company, Inc.