In the United States, consumer sentiment fell for the third consecutive month in June, largely due to concerns about personal finances and inflation. This month’s reading of 65.6 from the University of Michigan’s consumer sentiment index was below May’s figure of 69.1, although it was an improvement from the low point reached in June 2022 during peak inflation. Despite this improvement, consumer sentiment remains below levels indicative of a strong economy, with Americans continuing to have a negative outlook, especially after inflation rose sharply in 2021.
Consumer spending is a key driver of economic growth, and the University of Michigan’s index is an important measure of consumer confidence. Recently released data shows that inflation decreased significantly in May, with lower costs for gasoline, new cars, and car insurance. However, ongoing concerns about inflation persisted as it remained high in the first quarter of this year. The Federal Reserve and economists closely monitor these trends as they continue to impact consumer spending and economic activity in the country.
Despite a slowdown in spending after adjusting for inflation in April, Americans continue to invest in travel, dining out, and entertainment events, supporting economic activity in the country. While recent data suggests that consumer sentiment may be improving slightly due to a decrease in inflationary pressures, there are still many factors at play that could impact how consumers feel about their personal finances and the overall state of the economy moving forward.
