This survey reveals an interesting phenomenon: the confidence of all political camps has generally increased!
The Consumer Confidence Index in the U.S. has seen its largest increase since January 2024, with a significant improvement in short-term inflation expectations and easing concerns about the economy. The preliminary confidence index from the University of Michigan in early June jumped 8.3 points to 60.5, far exceeding all expectations in a Bloomberg economist survey.
Data released on Friday showed that consumers expect prices to rise by 5.1% over the next year, a substantial decrease from 6.6% in May, marking the largest monthly drop since October 2001. Their annualized inflation expectations for the next 5 to 10 years also slightly fell from 4.2% in May to 4.1%.
This confidence indicator, which has risen for the first time this year, suggests that market anxiety over Trump's protectionist trade policies has eased. The survey shows a significant improvement in economic expectations, and the personal financial outlook index has recorded its largest increase in over three years. However, current indicators such as the business environment, financial situation, and purchasing conditions are still below the levels at the end of last year.
"Consumers seem to have partially recovered from the shock of the extreme high tariffs announced in April and subsequent policy fluctuations," said survey director Joanne Hsu in a statement. "However, the public still believes that the economy faces widespread downside risks." Ongoing improvements in confidence may help alleviate concerns from economists and businesses regarding consumer spending and economic growth prospects.
The easing of inflation concerns is echoed by recent data - after excluding the volatile categories of food and energy, the core inflation indicator in May only rose slightly by 0.1%. A few days after the survey, conducted from May 27 to June 9, the U.S. and China announced a trade framework agreement to maintain current tariff levels.
Survey details show that the expectations index surged by 10.5 points to 58.4, marking the largest increase since December 2023; the present situation index rose from 58.9 to 63.7, the highest in three months.
It is noteworthy that confidence has generally increased across all political camps: the confidence index among Republicans has risen to its highest level since October 2020, while confidence among Democrats and independents has also reached a three-month peak.
Is investing always stepping on a landmine?Futubull AI is now online!Providing precise answers, comprehensive insights, and grasping key opportunities!
Editor/joryn
