Reopening Economy Fueling Employment Gains, In Turn Fueling Optimistic Consumer Sentiment
Ann Arbor, Mich. (PPD) — The Survey of Consumers preliminary reading on consumer sentiment rose from 72.3 in May to 78.9 in June, easily beating the consensus forecast. Forecasts for the headline index ranged from a low of 72.0 to a high of 78.0, and the consensus forecast was 75.0.
|June (P)||May (F)||May (P)||March||May||M-M||Y-Y|
|Index of Consumer Sentiment||78.9||72.3||73.7||89.1||100.0||+9.1%|
|Current Economic Conditions||87.8||82.3||83.0||103.7||110.0||+6.7%||-21.5%|
|Index of Consumer Expectations||73.1||65.9||67.7||79.7||93.5||-10.9%||-18.1%|
F = Final | P = Preliminary
“Consumer sentiment posted its second monthly gain in early June, paced by gains in the outlook for personal finances and more favorable prospects for the national economy due to the reopening of the economy,” said Chief Economist for Surveys of Consumers, Richard Curtin. “The turnaround is largely due to renewed gains in employment, with more consumers expecting declines in the jobless rate than at any other time in the long history of the Michigan surveys.”
Worth noting, the U.S. Bureau of Labor Statistics (BLS) reported the U.S. economy added 2.5 million jobs in May, the largest gain ever recorded. The NFIB Small Business Optimism Index also rebounded strongly 3.5 points in May to 94.4, up from 90.9 and beating the consensus forecast.
Small business owners expect the recession to be short-lived. Fifty-two percent (52%) reported capital outlays in the last six months.
Still, concerns over a resurgence in the spread of coronavirus (COVID-19) — which big media have pushed in recent weeks — are holding back greater levels of optimism. It is the most often cited cause of a renewed downturn and the financial damage from sustained high unemployment is the most often cited cause of a slow economic recovery.