Consumer Sentiment Plummets to Record-Low Amid Surging Inflation
June 10, 2022
Consumer sentiment fell to the lowest level on record in June, as surging costs for food and gas weighed on American consumers.
The University of Michigan’s consumer sentiment index plunged from 58.4 in May to 50.2 in June. That is the lowest recorded level since the university began tracking consumer sentiment data in the late 1970s. Economists surveyed by Bloomberg expected a much smaller decline to 58.1.
Almost half, 46%, of the consumers surveyed attributed their negative sentiment to rapidly climbing prices, and few expect their incomes to keep pace. Just 13% said they expect their income to increase more than inflation, the lowest percentage in nearly a decade.
The portion of the index that tracks consumers’ assessment of current economic conditions fell to a record-low 55.4 from 63.3 in May, while the gauge of expectations decreased to 46.8 from 55.2.
Separate data released Friday showed that inflation continued to accelerate, hitting the highest level in 40 years. The consumer price index was up 8.6% in May from a year prior. On a month-to-month basis, CPI jumped 1%.
Energy prices saw the biggest annual increase since 2005, surging 34.6% from a year earlier in May. Gasoline prices jumped nearly 49% from last year, and grocery prices climbed nearly 12%, the biggest annual increase since 1979.