Sentiment Sinks Worse Than All Economists Predicted, Worst Reading of 2012

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We already saw some weak manufacturing data from the New York Fed’s Empire Manufacturing data, but now we have a broader reading on the U.S. as a whole via consumer sentiment from the Reuters/University of Michigan sentiment.

This is a preliminary report for June and it will be revised in two weeks, but the preliminary report comes to 74.1 as a whole.  This is the lowest reading of 2012 and it comes in well under the 77.5 consensus target put out by Bloomberg.  It is also short of all expectations from economists because the range Bloomberg issued was 75.0 to 78.0.  May’s report was 79.3, so the slowdown has gone from bad to worse.

The current conditions index was 82.1, but the future sentiment via the Expectations component was all the way down at 68.9.  When the expectations are lower than the current data, it often suggests more possible weakness ahead.

While the latest official inflation report was closer to 2%, the data today suggests that consumers surveyed are expecting inflation to be about 3.0% in the coming 12-months and about 2.9% over the coming five year period.

Again. this data will be revised with a broader sample in two weeks.  The initial sample put together by the University of Michigan’s Consumer Survey Center asks questions to 500 households each month for the preliminary figures regarding financial conditions and attitudes about the economy.

JON C. OGG