TradingEconomics/Staff/6-10-2022
“The Michigan consumer sentiment in the US fell sharply to a record low of 50.2 in June of 2022, well below market forecasts of 58, preliminary figures showed. The current economic conditions subindex sank to an all-time low of 55.4 (vs 63.3 in May) and the expectations gauge plunged to 46.8, the lowest since May of 1980. Consumers’ assessments of their personal financial situation worsened about 20%. 46% of consumers attributed their negative views to inflation, the biggest share since 1981, during the Great Recession. Inflation expectations for the year ahead went up to 5.4% from 5.3% and the 5-year outlook to 3.3%, the highest since June of 2008.”
Michigan Consumer Sentiment
USAGOLD note: This is not what the Biden administration was hoping for in advance of the November elections. We note that “46% of consumers attributed their negative views to inflation.” The survey’s director since 1976, Richard Curtin, warns, “There is a high probability that a self-perpetuating wage-price spiral will develop in the next few years. Households have already become less resistant to paying higher prices, and firms have become less resistant to offering higher wages. Prices and wages will continue to spiral upward until the cumulative erosion in inflation-adjusted incomes causes the economy to collapse in recession.” [Link]
