U.S. consumer sentiment index likely to have dropped further in June

The U.S. Conference Board’s index of consumer sentiment is expected to have dropped further in June. According to a Wells Fargo research report, the consumer confidence index is likely to have dropped to 117 in May. In April, the index fell from March’s cycle-high of 124.9 to 119.4 in April and to 117.9 in May. The overall index was up 17.9 points since the U.S. election; however, the driving factors have shifted in the recent months.

The sharp rise from October to December was mainly due to the product of a jump in the expectations index, while the rise from January to its March peak was driven by consumers’ rising sentiment in their present situation. Confidence peaked for both the present situation and expectations indices in March at 143.9 and 112.3, respectively.

Most of the retreat since then has been in consumer expectations that is currently at around 10 points lower. The present situation measure dropped a bit in April; however, it rose higher in May to end to 140.7. The solid job market and rebounding economic fundamentals should continue to underpin this measure, while fiscal policy uncertainty might continue to hurt expectations, added Wells Fargo.

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