US: Consumer Sentiment rises but also prices – Wells Fargo

Data released on Friday, showed the Consumer Sentiment Index from the University of Michigan, according to preliminary data rose above expectation in June. Analysts at Wells Fargo noted it was the second highest level of the post-pandemic era, “as household finances hold steady even in the absence of stimulus checks.” They warn about the impact of rising prices. 

Key Quotes: 

“The headline measure rose 86.4, the second highest reading of the post-pandemic era. The high watermark of 88.3 reached in April (the month after the last round of stimulus checks) holds the top spot for now.”

“While households may not be receiving fresh funds, they are sitting on over $2.3 trillion in excess savings accrued over the past 15 months and with equity markets continuing to set fresh records, which may be a factor in why a steady share of consumers reported better household finances versus a year ago.”

“For now, at least, the stocked up cash is underpinning confidence despite worries about prices. After back-to-back upside surprises in the separately reported CPI numbers for May and April, which pushed the three-month annualized rate of price growth to 8.5%, it is little wonder why unfavorable perceptions of prices reduced overall buying attitudes for vehicles and household durable goods to their lowest point since 1982.”

“Consumers may have lowered their expectations slightly, but one thing is for sure: prices are still top-of-mind, and for some categories, at all-time highs.”