US Consumer Sentiment Rises to 49.5 in June, Below Forecast

Consumer sentiment improved in June after hitting a record low the previous month, though it remained below expectations as high prices continued to burden American households, according to a closely watched survey released Friday. The University of Michigan's final Consumer Sentiment Index rose to 49.5 this month, up from 44.8 in May. Economists had forecast a reading of 50.0.

The increase, while notable, leaves the index firmly in negative territory, indicating more consumers hold a pessimistic view of the economy than an optimistic one. The cost of living remains at the forefront of consumers' minds, said Joanne Hsu, director of the Surveys of Consumers. For the third straight month, over half of consumers spontaneously mentioned that high prices are weighing down their personal finances.

The survey also showed a modest easing in inflation expectations. Consumers' outlook for inflation over the next year dropped to 4.6% from 4.8% in May. Expectations for inflation over the next five years fell more significantly to 3.3% from 3.9% last month. Despite this decline, both near-term and long-term expectations remain elevated compared to pre-pandemic averages and levels seen before...