“Consumer sentiment retreated in late June to just above the May reading largely due to concerns about the potential impact of tariffs on the domestic economy,” the University of Michigan said in its latest ‘Surveys of Consumers.’
The Consumer Sentiment Index eased to 98.2 in its final reading in June from May’s 99.3 and fell short of the market expectation of 99.2.
Key takeaways from the official publication
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For the year ahead, consumers still anticipated that the economy would produce small additional declines in the unemployment rate as well as higher wage gains.
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Consumers also anticipated an uptick in inflation during the year ahead, partly due to rising energy prices and partly due to tariffs.
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The potential impact of tariffs on the domestic economy was spontaneously cited by one-in-four consumers, with most expecting a negative impact on the domestic economy (21% out of 26%).
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The primary concerns were a downshift in the future pace of economic growth and an uptick in inflation.
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While tariffs may have a direct impact on only a very small portion of overall GDP, the negative impact could quickly generalize and produce a widespread decline in consumer confidence.
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