The views of the economy of American households turned even grimmer as spring turned to summer.
The University of Michigan’s survey of consumer sentiment registered a small decline in its final June reading to 50.0, down two-tenths of a point from the sharp decline to a record low in the midmonth reading.
Economists had expected consumer sentiment to hold at the deeply depressed midmonth reading, which was the worst on record in data going back to the 1970s. The final June reading is now the record low.
The decline in consumer sentiment is widespread, hitting Republicans and Democrats; wealthy, poor, and middle class; homeowners and renters; from sea to shining sea.
“Consumers across income, age, education, geographic region, political affiliation, stockholding and homeownership status all posted large declines,” Joanne Hsu, the director of the survey said.
About 79 percent of consumers expect bad times in the year ahead for business conditions, the highest since 2009.
Inflation continued to be a big drag on sentiment. Forty-seven percent of consumers blamed inflation for eroding their living standards, just one point shy of the all-time high last reached during the Great Recession.
“The final June reading of the median expected year-ahead inflation rate was 5.3 percent, little changed from mid-month or the preceding four months. In contrast, long run expectations receded from its mid-month reading of 3.3 percetn and settled at 3.1 percent, back within the 2.9-3.1% range seen in the past 10 months. Consumers also expressed the highest level of uncertainty over long-run inflation since 1991, continuing a sharp increase that began in 2021,” Hsu said.