The University of Michigan’s Consumer Sentiment Index in June increased to 85.5 from May’s final reading of 82.9, the second-highest level since the COVID-19 pandemic took hold in the U.S. in March 2020, Bloomberg and other news outlets reported on Friday (June 25). The index was below forecasts that predicted an average increase of 86.5, according to a Bloomberg survey of economists.
“When the pandemic first began, consumers were quite uncertain about their job and income prospects, but reported widespread declines in market prices for homes, vehicles and household durables,” Richard Curtin, director of the survey, said in the report. “Those favorable price references have dropped to the most negative in a decade, and job and income prospects have improved, but not quite as favorable as in the last few years of the prior expansion.”
Consumers surveyed also indicated an expectation that inflation would go up 4.2 percent over 2020, which is the second-highest level in 10 years. Long-term prices are expected to increase 2.8 percent over 3 percent in May.
The index for current conditions dropped to 88.6 from 89.4 in May, while the measure for expectations went up to 83.5, according to the survey, per Bloomberg.
“All of the June gains were among households with incomes above $100,000, and mainly in the way they judged the future economic outlook,” Curtin said, per Chain Store Age.
Consumers also indicated that they expected the economy to continue its post-pandemic recovery, and anticipated that unemployment numbers would continue falling off.
Personal income also dropped, aligning with the reduction in federal pandemic relief funding, according to the Friday (June 25) report from the Bureau of Economic Analysis (BEA). The numbers show signs of a rebounding economy and job market post-pandemic.