US consumer sentiment plunged in early June to the lowest on record as soaring inflation continued to batter household finances.
The University of Michigan’s preliminary June sentiment index fell to 50.2 from 58.4 in May, data released Friday showed. The figure was weaker than all estimates in a Bloomberg survey of economists which had a median forecast of 58.1.
Inflation expectations, which the Federal Reserve watches closely, also moved higher early this month and 46% of respondents attributed their negative views to persistent price pressures. Just 13% expect their incomes to rise more than inflation, the lowest share in almost a decade.
“Throughout the survey, consumers signaled strong concerns that inflation will continue to erode their incomes, and the factors they cited are unlikely to abate soon,” Joanne Hsu, director of the survey, said in a statement.
“While consumer spending has remained robust so far, the broad deterioration of sentiment may lead them to cut back on spending and thereby slow down economic growth,” Hsu said.
Separate data Friday showed a fresh 40-year high inflation rate. The widely followed consumer price index increased 8.6% in May from a year earlier. Compared with a month earlier, the inflation gauge rose 1% in a broad advance that topped all estimates.
