U.S. consumer sentiment bounced off record lows in early June as easing gasoline prices offered households some relief, though concerns about inflation stoked by the Middle East conflict lingered.
Lower-income households led the broad improvement in sentiment reported by the University of Michigan’s Surveys of Consumers on Friday. Gasoline prices have dropped from four-year highs over the past three weeks, according to data from motorist advocacy group AAA, as oil prices stayed below $100 a barrel despite a fragile ceasefire.
Labor market resilience, marked by three consecutive months of above-expectations job growth and a stable unemployment rate, also likely contributed to the increase in the sentiment. But the U.S.-led war against Iran, now in its fourth month, still poses a risk to the economic outlook.
President Donald Trump denied on Friday that the United States had made major concessions to Iran. Trump on Thursday called off new strikes on Iran saying a deal had been reached.
"It looks like gasoline prices peaked around the Memorial Day holiday as often happens each year," said Christopher Rupkey, chief economist at FWDBONDS. "There is still a cost-of-living crisis and goods prices are not going to be coming back down. The economic risks are still out there but at least the outlook is less dire than it was before."
The University of Michigan said its Consumer Sentiment Index increased to 48.9 this month from an all-time low of 44.8 in May. Economists polled by Reuters had forecast the index climbing to 46.0. Sentiment increased across age groups, education and political party affiliation.
Source : Investing.com