By Nathalie Voit
A University of Michigan consumer sentiment report showed Americans are feeling the most pessimistic about the U.S. economy since 1952.
After posting a preliminary reading of 50.2 two weeks ago, the final June index for the Survey of Consumer Sentiment dropped to 50.0, the lowest on record. The index for June represents a 14.4% drop from the previous month. It is the worst reading since the University of Michigan began collecting consumer sentiment data for the survey seven decades ago.
The final report is also down 41.5% over the year.
The Index of Consumer Expectations, which tracks inflation expectations at the one-year horizon and ten years ahead, posted a 13.9% drop for the month to settle at 47.5 in June. The index trended downwards by 43.1% over the past twelve months.
The Current Economic Conditions Index, which evaluates the near-term economic outlook, sank to 53.8 in June after tumbling 15.0% over the month. The index is off by 39.3% since last year.
The tremendously bleak numbers are a testament to the impact of rampant inflation on U.S. consumers.
According to Surveys of Consumers Director Joanne Hsu, around four-fifths (79%) of those surveyed expected business conditions to worsen in the year ahead, the highest since 2009.
Meanwhile, nearly one in two participants (47%) blamed inflation for their declining standard of living, just one point less than those who cited rising costs during the Great Recession.
The survey also found consumers were the most uncertain about long-run inflation since 1991, continuing a dismal trend that began in 2021.
The University of Michigan said the declines in consumer sentiment were consistent across income group, age, education level, geographic region, political identity, stockholding, and homeownership status.
