UMich sentiment was expected to have accelerated its rebound from preliminary May data, but it disappointed (despite surging stocks and reopenings).
Headline UMich Sentiment up from 71.8 to 72.3 (but down from the 73.7 flash print and below the 74.0 expectations)
Current Conditions up from 74.3 to 82.3 (but down from the 83.0 flash print and below the 84.0 expectations)
Expectations "Hope" down from 70.1 to 65.9 (and down from the 67.7 flash print and below the 68.4 expectations)
This is the lowest level for expectations since Nov 2013.
It should not be surprising that a growing number of consumers expected the economy to improve from its recent standstill, or that the majority still thought conditions would remain unfavorable in the year ahead. This has been a common occurrence in past cycles. The gap between judgements about economic growth and the current performance is likely to grow significantly when the 2nd quarter GDP is announced.
Is it any wonder current conditions sentiment is rebounding - screw 40 million unemployed, the government just dumped $ 3 trillion in transfer payments for people to sit on their ass for a month or two?
Federal payments distributed under the CARES Act are giving a jolt to consumers’ finances -- though the bump may be temporary as some of the stimulus money includes one-time checks. And while the worst of the economic downturn may be over, Americans are expecting prolonged hardship, according to the report.
The 50% of consumers who expected “bad financial times over the next five years” was the second-worst reading since Donald Trump became president, Richard Curtin, director of the survey, said in a statement.
The question - as we noted previously, is what happens when the transfer payments run out and unemployment remains at depression levels?
Finally, consumers reported hearing more negative economic news in May than at any other time in the long history of the surveys, with an all-time record of 89% mentioning the steep increases in unemployment.