Consumer sentiment continued to improve in the month of June, although the University of Michigan index rose by less than expected, it was certainly not a bad number. The index rose to 69 in mid-June from 68.7 in May, up sharply from the 28-year low of 55.3 in November, but still below the 88.2 ten year average.
As I said in the Early look, it appears the numbers ARE peaking. The market forecasts were for a higher number, in the area code of 69.5.
It not clear to me that it's prudent to plan for a strong summer season for the consumer. From where I sit a cautious consumer still prevails and most remain resolute about becoming more practical when making purchasing decisions.
As we head into the key summer driving season the price of gas at the pump is surging. While the relative "affordability" compared to last year's $4+/gal price tag has most consumer feeling less of a pinch, the 63% increase year-to-date will put the brakes on incremental spending. Especially with the sequential increase that is outlined in the chart below.
Howard Penney
Managing Director
