Consumer Confidence Stable, But Economists Worry About Underlying Trends

The University of Michigan’s Consumer Sentiment Index fell slightly to 94.7 in the mid-June reading. It had spiked to 94.7 in the final May reading. But the survey’s Chief Economist Richard Curtin and many economists focused on some worrisome underlying trends.

Curtin said consumers rated their current financial situation at the highest levels since the mid-2000 peak, “largely due to wage gains.” But he added that consumers do not believe the economy is as strong as it was last year “nor do they anticipate the economy will enjoy the same financial health in the year ahead as they anticipated a year ago.” The mid-month Expectations Index saw a larger drop.

The piece of survey data that economists latched onto was consumers’ expectations for inflation five years out. That figure dropped to 2.3%, its lowest level in the survey’s history, which dates back to 1946. Some economists have detected a bit of an uptick in less volatile inflation items, and express worry consumers may be surprised if inflation picks up.