Consumer sentiment unexpectedly dropped in June to the lowest level since the presidential election in November, according to the University of Michigan’s monthly survey.
The widely watched consumer sentiment metric fell to 94.5 in June from 97.1 in May. Economists had expected a slight increase.
Prior to the testimony of former Federal Bureau of Investigation chief James Comey, sentiment had been headed in the expected direction. It was averaging a score of 97.7, the University of Michigan researchers said. Then Comey testified and consumer sentiment plunged. Since June 8, the index registered a score of 86.7, a huge 11 point decline.
The decline was observed across the political spectrum but was more pronounced among Republicans and independents.
“While this break corresponds with James Comey’s testimony, only a few consumers spontaneously referred to him or his testimony when asked to explain their views. Importantly, the decline was observed across all political parties, but the loss in confidence among self-identified Republicans since June 8th was larger than among Democrats (9.2 vs. 6.8 Index-points), with Independents showing the greatest falloff (11.5 Index-points),” the University of Michigan researchers said.
In short, following the Comey testimony, consumers are far less optimistic about the economy.