The Survey of Consumers, a closely-watched gauge of consumer sentiment, posted a still-elevated final reading of 98.0 for June. That’s slightly below the consensus forecast (99.0). The Current Economic Conditions rose 116.5 from 111.8 in May, while the Index of Consumer Expectations fell from 89.1 to 86.3.
The falloff in confidence was minor, as the Sentiment Index has been virtually unchanged for the past three months. The persistent strength has been due to favorable assessments of jobs and incomes.
“While consumers anticipated rising interest rates during the year ahead, those expected increases were associated with a modest decline in longer term prospects for the national economy,” said Richard Curtain, Chief Economist at Survey of Consumers. “For the year ahead, consumers still anticipated that the economy would produce small additional declines in the unemployment rate as well as higher wage gains.”
Indeed, the Personal Income and Outlays report by the Bureau of Economic Analysis (BEA) continued to show increased wages and salaries. What was new this month was the gain in inflation to the target set by the Federal Reserve.
“Consumers also anticipated an uptick in inflation during the year ahead, partly due to rising energy prices and partly due to tariffs,” Mr. Curtain added.