With the second straight month of 10% jumps, consumer sentiment climbed to its highest reading since February of this year on the basis of easing price pressures at the pump in recent weeks, according to the University of Michigan Survey of Consumers. All five index components improved, led by significant 20% increases in buying conditions for durables as well as year-ahead business conditions.
“This month’s rise in sentiment was pervasive across the population, seen across groups by age, income, wealth, and political party,” said Joanne Hsu, director of Surveys of Consumers. “Particularly strong increases were seen among consumers without a bachelor’s degree. However, with prices remaining frustratingly high, consumers are hardly ebullient about the economy; sentiment is down 12% from a year ago.
“Thus, sentiment’s upward momentum may prove difficult to sustain if recent declines in gas prices continue to reverse course. Interviews for this release spanned June 23 to July 13, with more than 70% completed before the resumption of US strikes against Iran on July 7 and the subsequent increase in gas prices.”
