The numbers: Consumers were slightly more optimistic about the economy at the end of June, but the effects of high inflation in the past few years still weighed on their minds.
The final reading of the consumer sentiment index rose to 68.2 in June from a preliminary 65.6 earlier in the month, but it’s still the lowest level in seven months.
The index also stands well below a pre-pandemic peak of 101.
Although Americans think inflation will ease, they say high inflation and slower growth in incomes has made them more worried about their own finances, according to the University of Michigan survey.
A new report on consumer spending released Friday morning appeared to underscore the anxiety. Spending was weak for a second month in a row.
Key details: A gauge that measures what consumers think about the current state of the economy fell to 65.9 last month.
A measurement of expectations for the next six months also fell for the third month in a row to 69.6
Consumers think inflation will average 3.0% in the next year, down from 3.3% in the prior month. The rate of inflation based on the consumer price index rose 3.3% in the 12 months ended in May.
Big picture: Americans are unhappy about lingering inflation and high interest rates. Rising incomes and low unemployment have not been enough to mollify their anxiety — and it could help determine the next president.
Looking ahead: “As households increasingly feel the weight of elevated inflation, higher interest rates, and lower wage growth, they’re also recognizing that they just don’t have as much extra cash available to spend,” said Jim Baird, chief investment officer of Plante Moran Financial Advisors.
