|
|
The University of Michigan announced that consumer sentiment fell to 50 in June—its lowest reading ever as American customers worry about inflation and rising energy costs.
The Wall Street Journal reported that the readings date back to 1952. There has been a downward trend in recent months. May’s reading came in at 58.4, the report said.
“The final June reading confirmed the early-June decline in consumer sentiment … Consumers across income, age, education, geographic region, political affiliation, stockholding, and homeownership status all posted large declines,” Joanne Hsu, director of the Surveys of Consumers, said in a statement obtained by Yahoo! Finance.
She said about 80 percent of those polled said they anticipate bad times for business conditions, which is also the highest since 2009.
About 47 percent of consumers pointed to inflation as their “paramount concern” in the year ahead and for “eroding their living standards.”
Although inflation has not reached double digits, as it did in the mid- and late 1970s when it peaked at 14.6 percent, its relatively swift arrival, compared to building over years as it did in the 1970s, has eroded public confidence in U.S. leaders and institutions, even among those who are not suffering economically.
The Yahoo! report pointed to other troubling signs for the American consumer. The preliminary S&P Global Composite Purchasing Managers’ Index for June was 51.2, the weakest level since January, “and S&P’s manufacturing output index slid into contractionary territory and a two-year low.”
The WSJ reported that new-home sales jumped 10.7 percent, but said economists believe that trend will begin to slow with higher mortgage rates hitting the market. The average 30-year fixed-rate mortgage rose to 5.81 percent last week, which the paper pointed out was the highest since 2008.
“For buyers of a median-priced home, the one-two punch of record-high prices and rising interest rates has pushed the monthly mortgage payment to about 64 percent more than last year, tacking on over $800 to the cost of financing,” George Ratiu, senior economist for Realtor.com, told MoneyWise.
American drivers facing record high gas prices have been buying less gas at stations.
The WSJ, citing OPIS, an energy-data provider, reported last week that gas stations across the U.S. said sales were down about 8.2 percent compared to 2021.
TRENDPOST: It’s the economy, stupid.
As we have greatly detailed, the rich have gotten richer as the middle class keeps shrinking. Good economic statistics mean little when a loaf of bread costs $6 or your grocery store is chronically out of cat food.
Russia’s war deals a major setback to Biden’s hopes of halting inflation that will pick voters’ pockets between now and November.
The Fed’s action to curb inflation will be too little too late.
Jerome Powell, the Fed Head, faced a grilling in front of the Senate Banking Committee on Wednesday, and Sen. Elizabeth Warren, D-Mass., warned him not to be too bold with interest rate hikes.
“You know what’s worse than high inflation and low unemployment? It’s high inflation and a recession with millions of people out of work. And I hope you’ll reconsider that before you drive this economy off a cliff,” she said.
The economy has already fallen off the cliff.