EmailConsumer sentiment, which surged from 69.8 in April to 74.3 in May, took a brief respite in June and fell to 71.4 in the preliminary reading of the University of Michigan Consumer Sentiment Index. The Briefing.com consensus expected sentiment to fall to 73.5.
The drop in sentiment followed the May collapse of the Conference Board's Consumer Confidence index. That measure fell from 66.0 in April to 60.8 in May.
Typically, consumer sentiment/confidence indices correlate with equity prices, employment, media reports, and oil/gasoline prices. The expectation that the recent spike in gasoline prices will reverse in the near future was the basis for the surge in consumer sentiment last month.
So far gasoline prices remain elevated, but they have been coming down since the start of May. The labor market recovery, meanwhile, has softened notably over the last few weeks. As a result, the current conditions index dropped from 81.8 in May to 79.6 in June, its lowest level since October 2010.
The expectations index also declined, from 69.5 in May to 66.8 in June, but this is well above the 61.6 reading in April.
