A report released by the University of Michigan on Friday showed U.S. consumer sentiment has improved by much more than expected in the month of June.
The University of Michigan said is consumer sentiment index climbed to 63.9 in June from 59.2 in May. Economists had expected in the index to inch up to 60.0.
“Consumer sentiment lifted 8% in June, reaching its highest level in four months, reflecting greater optimism as inflation eased and policymakers resolved the debt ceiling crisis,” said Surveys of Consumers Director Joanne Hsu.
“As it stands, though, sentiment remains low by historical standards as income expectations softened,” she added. “A majority of consumers still expect difficult times in the economy over the next year.”
The bigger than expected increase by the headline index came as the current economic conditions index rose to 68.0 in June from 64.9 in May, while the index of consumer expectations jumped to 61.3 in June from 55.4 in May.
The report also showed a significant decrease in year-ahead inflation expectations, which tumbled to 3.3 percent in June from 4.2 percent in May, hitting the lowest level since March 2021.
Five-year inflation expectations edged down to 3.0 percent in June from 3.1 percent in May, again staying within the narrow 2.9-3.1 percent range for 22 of the last 23 months.
“Long-run inflation expectations remained elevated relative to the 2.2-2.6% range seen in the two years pre-pandemic,” said Hsu.
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