Consumer Sentiment Recedes, Expectations Stay Strong

After touching a six-year high in May, consumer sentiment showed a decline in the preliminary June report from ""Surveys of Consumers"":http://new.sca.isr.umich.edu/.

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According to this month's first reading, the Consumer Sentiment Index has a value of 82.7, a turnaround from the ""84.5 reading in May"":https://themreport.com/articles/consumer-sentiment-beats-expectations-2013-05-31.

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An analysis from economist Amna Asaf at Capital Economics pointed to the ""modest rebound in gas prices and the latest wobble in equity prices"" as cause for the dip. However, Asaf noted the drop ""reversed only part of the sharp gain of May.""

The Current Economic Conditions Index also declined, falling to 92.1 from 98.0. According to Asaf, that index is normally driven by labor market conditions, which appear to be gradually improving.

Meanwhile, the Expectations Index climbed from 75.8 to 76.7, a seven-month high. Based on the historical relationship, Asaf said the index suggestions Q2 consumption growth could be almost as strong as Q1--qualifying that, however, with the note that ""the relationship between confidence and actual spending has never been particularly good.""

""On the whole, the decline in consumer confidence was a bit odd given that all of the other measures of sentiment increased in June,"" Asaf said. ""But the latest stabilisation in gasoline prices, higher equity prices and the improving housing and labour markets are likely to keep consumers feeling upbeat.""