Research >> Economics
University of Michigan Consumer Confidence Preliminary June Results increased to 78.9
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. 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. Despite the expected economic gains, few consumers anticipate the reestablishment of favorable economic conditions anytime soon. Bad times financially in the economy as a whole during the year ahead were still expected by two-thirds of all consumers, and a renewed downturn was anticipated by nearly half over the longer term. The most often cited cause of a renewed downturn is a resurgence in the spread of the coronavirus, and the most often cited cause of a slow economic recovery is the financial damage from persistently high unemployment. Each of these factors have increased the uncertainty consumers now attach to their expectations. The resulting record level of income uncertainty has had a significant impact on consumers' willingness to make discretionary purchases, although uncertainty has slightly eased recently (see the chart). Importantly, these concerns have also been mitigated by deep discounts on prices and interest rates. NBER's cyclical peak in February and recession call was no surprise to consumers: during the past three months 89% to 95% have judged the economy in decline, up from the recent low of 24% in January of 2020.
Posted: June 12, 2020 Friday 10:00 AM