Americans are expressing concerns about their finances and ongoing inflation, resulting in a decline in consumer sentiment for the third consecutive month. In June, the University of Michigan’s consumer sentiment index fell to 65.6 from 69.1 in May, although this reading is significantly higher than the low point in June 2022 during peak inflation levels. Despite the decline, recent data suggests a substantial cooling of inflation in May, with decreases in gasoline, new cars, and car insurance costs.
Consumer sentiment has been subdued since the pandemic, especially following the inflation spike in 2021. The University of Michigan’s index showed improvement last winter and spring, reaching a peak of 79.4 in March. However, this positive trend has reversed as inflation rates remained high in the first quarter of this year. These economic challenges continue to affect consumer behavior and spending patterns, which play a crucial role in driving economic growth in the United States.
While consumer spending slowed down after adjusting for inflation in April 2023, Americans continued to spend on travel, dining out, entertainment events despite their financial concerns. Consumer spending is an essential component of the U.S economy and closely monitored by the Federal Reserve and economists.
Overall, while recent data suggests a cooling of inflation rates may have brought some relief to consumers’ financial concerns; it remains uncertain how long this trend will last as ongoing economic challenges continue to impact consumer sentiment and behavior.
Despite declining consumer sentiment due to ongoing economic challenges such as high inflation rates and uncertainties surrounding personal finances; recent data indicates that Americans continued to spend on essential items such as travel
