Easing Gas Prices Lift Consumer Sentiment From All-Time Low

Consumer sentiment has ticked up as gas prices eased, according to preliminary results for June from the University of Michigan’s Surveys of Consumers. The report’s Index of Consumer Sentiment improved by about four index points, or 9%, compared to May. Sentiment improved across age, education and political party. Surveys of Consumers Director Joanne Hsu attributed the gains to an easing of gas prices in early June. “Lower-income consumers exhibited a particularly strong sentiment increase, consistent with the fact that gasoline comprises a larger share of their budgets,” Hsu said. This marked a turnaround in consumer sentiment. The index had dropped to a record low in May, driven by gas price worries and concerns related to the war in the Middle East. The previous record low had been set a month earlier, in April, for the same reasons. These readings were the lowest seen in the over 73-year history of the Index of Consumer Sentiment. The latest edition of The Conference Board’s Consumer Confidence Index, which was released May 26, also found that gas prices and worries about war-related inflation caused consumer confidence to fall in May. The Conference Board said at the time that consumers’ write-in responses on factors influencing the economy had continued to “skew towards pessimism” in May and that references to prices and oil and gas had increased for the second month in a row. Despite the gains seen in early June in the newly released Surveys of Consumers, consumer sentiment in the latest survey remained 13% below where it was in January and 19% below where it…

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