Consumer confidence came in surprisingly strong in June, as the University of Michigan’s index recorded its best half-year average since the second-half of 2000.
The index fell to 95.1 in June from May’s 97.1, the lowest level since the election of Donald Trump as President of the United States. Economists had expected a steeper decline to 94.5. The index is up 1.7% compared with a year ago.
Consumer sentiment about present conditions improved in June compared with the previous month as well as the year-ago period. The expectations aspect of the index, which measures the outlook for the future, slipped 4.3% from May but remains above year-ago levels.
Consumers remain starkly divided along party lines, with Republican optimism balanced against Democrat pessimism. “Surprisingly, the optimism among Republicans and Independents has largely resisted declines in the past several months despite the decreased likelihood that Trump’s agenda will be passed in 2017,” the researchers say.
So what does this tell us about the economy? In the words of the University of Michigan researchers, “the data provide no indication of an imminent downturn nor do the data provide any indication of a resurgent boom in spending.”