US Consumer Sentiment Improves But Remains Close to Record Low

US consumer sentiment increased in June, reaching 65.6, up from 61.3 in May, according to preliminary data from the University of Michigan's Surveys of Consumers. This improvement is attributed to a decrease in gasoline prices, which has offered some relief to households contending with persistent inflation. Despite the uptick, the current sentiment level remains close to the record low of 50.8 recorded in June 2022, indicating ongoing economic anxieties among consumers. The survey also revealed that consumers' expectations for inflation over the next year have slightly decreased, with the median expectation for inflation in the next 12 months falling to 3.1% from 3.3% in May. However, expectations for inflation over the next five years rose to 3.0% from 2.8% in the previous month. Consumers' views on their personal financial situation also saw a marginal improvement, with 28% reporting their finances were better off compared to a year ago, an increase from 24% in May. Conversely, 34% reported their finances had worsened, a slight decrease from 35% in May. The index for current economic conditions rose to 62.6 from 59.4, while the expectations index edged up to 67.2 from 62.7. These figures suggest a cautious optimism, with consumers acknowledging immediate price relief but maintaining concerns about longer-term economic stability and inflation.