Inflationary concerns outweigh expected income growth
June 24, 2022
Morgan Sherburne, 734-647-1844, [email protected]
Surveys of Consumers, 734-763-5224
ANN ARBOR—Consumer sentiment continued its downward trend, falling 14.4% in June, according to the University of Michigan Surveys of Consumers.
All components of the index fell this month, with the steepest declines in the year-ahead outlook for the economy, down 24% from May, and consumers’ assessments of their personal financial situation, which worsened about 20%, said U-M economist Joanne Hsu, director of the surveys.
The June consumer sentiment index reading was an all-time low for the survey, comparable to the trough reached during the 1980 recession.
“While consumers still appear relatively optimistic about the stability of their incomes, their perceptions of the economy are much more strongly influenced by concerns over inflation,” Hsu said. “As higher prices become harder to avoid, consumers may feel they have no choice but to adjust their spending patterns, whether through substitution of goods or foregoing purchases altogether. The speed and intensity at which these adjustments occur will be critical for the trajectory of the economy.”