Michigan Consumer Sentiment Index Declines in June

The University Of Michigan Survey Of Consumers showed that the consumer sentiment index declined in the first half of July due to the widespread resurgence of the coronavirus disease (COVID-19).

After the index increased in June, its reading was reversed, leaving the sentiment index in early July insignificantly above the April low by 1.4 points.

This comes after the steepest two-month decline on record.

The preliminary reading for the Index of Consumer Sentiment recorded 73.2 in July, compared with 78.1 in June, and 98.4 in July 2019, decreasing by 6.3% on a monthly basis and 25.6% on an annual basis.

“It is not surprising that consumers need some time to reassess the likely economic impact from the coronavirus on their personal finances and on the overall economy. Unfortunately, declines are more likely in the months ahead as the coronavirus spreads and causes continued economic harm, social disruptions, and permanent scarring.”

The University Of Michigan report revealed that another aggressive fiscal response is urgently needed to focus on financial relief for households as well as state and local governments.

Meanwhile, the current economic conditions index declined by 3.3% on a monthly basis, to record 84.2 in July, from 87.1 in June, while the index of consumer expectations plunged by 8.4% to 66.2.