June Consumer Sentiment Rose 8.0% Over May, But Still Down YOY

Ann Arbor, MI, June 26, 2020-Consumer sentiment rose 8.0% to 78.1 in June, according to final results from the University of Michigan Survey of Consumers.

This represents a 20.5% decline year over year.

“Consumer sentiment slipped in the last half of June, although it still recorded its second monthly gain over the April low,” says Survey of Consumers chief economist Richard Curtin. “While most consumers believe that economic conditions could hardly worsen from the recent shutdown of the national economy, prospective growth in the economy is more closely tied to progress against the coronavirus. The early reopening of the economy has undoubtedly restored jobs and incomes, but it has come at the probable cost of an uptick in the spread of the virus. The Sentiment Index rose by just 0.5 Index-points among Southern residents in June, and by only 3.3 Index-points among Western residents (see the featured chart). In contrast, the Sentiment Index among residents of the Northeast rose by an all-time record of 19.1 Index-points in June, with residents apparently expecting the later and more gradual reopening to produce at worst a negligible increase in infections. The resurgence of the virus will be accompanied by weaker consumer demand among residents of the Southern and Western regions and may even temper the reactions of consumers in the Northeast. As a result, the need for additional fiscal policies to relieve financial hardships has risen. Unfortunately, confidence in government economic policies has fallen in the June survey to its lowest level since Trump entered office. The need for new relief programs is urgent and would best be accomplished before the national elections dominate the debate.”