Consumer Sentiment Down 2.7% in June, Up 1.1% Over June '16
Ann Arbor, MI, June 16, 2017-Consumer sentiment fell 2.7% in early June to 94.5 from May’s 97.1, according to preliminary results from the Survey of Consumers. This represents a 1.1% increase over June 2016’s rate.
“The modest early June drop of 2.6 points in the Sentiment Index masks a much larger decline since June 8th,” according to Survey of Consumers chief economist Richard Curtin. “Prior to that date the Sentiment Index had averaged 97.7, but since June 8th, the Index fell to 86.7, a decline of 11.0 points. While this break corresponds with James Comey's testimony, only a few consumers spontaneously referred to him or his testimony when asked to explain their views. Importantly, the decline was observed across all political parties, but the loss in confidence among self-identified Republicans since June 8th was larger than among Democrats (9.2 vs. 6.8 Index-points), with Independents showing the greatest falloff (11.5 Index-points). The size of the partisan difference between Democrats and Republicans in the Expectations Index, however, was largely unchanged (55.6 Index-points prior to June 8th, and 51.2 after). The recent erosion of confidence was due to more negative perceptions of the proposed economic policies among Democrats and the reduced likelihood of passage of these policies among Republicans. Fortunately, a strong job market, improved household income and wealth have provided a financial buffer against rising uncertainties. Nonetheless, consumers have become less optimistic about the future course of the domestic economy. Even with the expected bounce back in spending in the current quarter, personal consumption is expected to advance by 2.3% for all of 2017.”