Consumer Sentiment: Record Low

Bottom Line:  Consumer sentiment plunged in early June and remained low throughout the month, according to the final reading of the University of Michigan survey. The survey index fell to a record low as consumers across all incomes, ages, and geographies reported lower sentiment, regardless of their wealth or education. While the survey size is relatively small, the impact of historic consumer inflation can't be understated. 79% of consumers reported bad times ahead for business conditions, the highest since 2009. The one positive in this report was a very slight decline in consumers' expectations for future inflation. While not much, consumers might be starting to assume inflation can't get much worse. Overall, as the summer season gets underway, consumers are experiencing a sharp drop in their disposable income as they pay more at the pump and face sticker shock at the high travel costs. While income gains had absorbed some of the impacts a year ago, this year, most households feel less wealthy as they burn savings for essential needs and watch investment portfolios decline in value.