Lower gas prices in the wake of the end of most hostilities in Iran not only gave drivers some relief, but also likely inspired a boost in consumer sentiment.
That sentiment rose to 49.5 this month, according to the University of Michigan’s final June sentiment index. That’s up from a record low point of 44.8 in May, the survey shows. While that showed improvement from the survey’s preliminary reading, Bloomberg reported it’s still the second-lowest rating since the 1970s.
Consumers expect prices to rise at an annual rate of 4.6% over the next year, down from 4.8% in May, according to Bloomberg. They also saw costs rising at an annual rate of 3.3% over the next five to 10 years, erasing the prior month’s surge.
Recent events have seen gasoline prices drop more than 60 cents a gallon on average, boosting household confidence. The report noted improvements in sentiment across incomes and political affiliations.
However, “the cost of living remains at the forefront of consumers’ minds,” Joanne Hsu, director of the survey, said in a statement. “Over half of consumers spontaneously mentioned that high prices are weighing down their personal finances.”
A gauge of consumers’ perceptions of their personal finances also improved from May, though remained close to the lowest since 2009.
Even so, U.S. household demand has proved resilient. Data released earlier this week showed price-adjusted consumer spending accelerated in May, Bloomberg reported.
Looking ahead, Americans’ views of their future financial situation and the economy in the years ahead also improved. The University of Michigan’s expectations index climbed to a three-month high.
Hsu said the figures suggest consumers believe the economic impact of the Iran war is likely to be limited to the short-term.
Source: https://www.corpmagazine.com/industry/business/consumer-sentiment-rises-but-still-close-to-record-low/
