Key facts
- US consumer sentiment rose to 48.9 in early June, exceeding forecasts.
- Falling gasoline prices contributed to the sentiment increase, particularly for lower-income households.
- Inflation expectations for the next year eased to 4.6%, and for five years to 3.4%.
- Despite improvements, consumers remain concerned about persistent inflation.
- Wall Street stocks traded higher, the dollar slipped, and Treasury yields rose.
US consumer sentiment saw a significant improvement in early June, with the University of Michigan's Consumer Sentiment Index rising to 48.9 from a record low of 44.8 in May. This figure surpassed economists' expectations, who had predicted a climb to 46.0.
The survey indicated that lower-income consumers, who allocate a larger portion of their budgets to gasoline, exhibited a particularly strong increase in sentiment. Despite the improvement, consumers remain focused on 'kitchen table issues' and are burdened by recent inflation escalation, worrying that higher prices could persist, especially in the short term.
Easing gasoline prices led to a moderation in consumers' inflation expectations this month. The year-ahead inflation expectation slipped to 4.6% from 4.8% in May, and expectations for the next five years dropped to 3.4% from 3.9% last month.
Wall Street stocks traded higher, the dollar slipped against a basket of currencies, and U.S. Treasury yields rose.