Consumer sentiment in the U.S. has deteriorated in the month of June, according to a report released by the University of Michigan on Friday, with the pullback in sentiment reflecting concerns about the impact of higher tariffs.
The preliminary report said the consumer sentiment index fell to 97.9 in June from 100.0 in May, while economists had expected the index to dip to 98.0.
“Some of the decline was due to expected tariffs on Mexican imports, which may be reversed in late June, but most of the concern was with the 25% tariffs on nearly half of all Chinese imports,” said Surveys of Consumers chief economist Richard Curtin.
He added, “Consumers responded by lowering growth prospects for the national economy, and as a consequence, reduced the expected gains in employment.”
The decrease in consumer sentiment reflected a deterioration in expectations, with the index of consumer expectations tumbling to 88.6 in June from 93.5 in May.
On the other hand, the report said the current economic conditions index climbed to 112.5 in June from 110.0 in the previous month.
Inflation expectations showed a notable decline during the month, with one-year inflation expectations falling to 2.6 percent from 2.9 percent and five-year inflation expectations slumping to 2.2 percent from 2.6 percent.
“Consumers anticipated an average long-term inflation rate of just 2.2%, the lowest rate the surveys have recorded since the question was introduced forty years ago,” Curtin said.
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