U.S. consumer sentiment fell to a record low as inflation is still a top concern for American families.
According to a University of Michigan survey released Friday, the final consumer sentiment index reading for the month fell to 50.0 from 55.2 in May on rising fears of an economic slowdown. That compared with a 50.2 reading earlier in June.
“Consumers across income, age, education, geographic region, political affiliation, stockholding and homeownership status all posted large declines,” the University’s Consumers Surveys head Joanna Hsu said. “About 79% of consumers expected bad times in the year ahead for business conditions, the highest since 2009.”
The expected survey, which has an immediate effect on markets, notes that one-year inflation expectation was unchanged from May.
The University of Michigan report also says that households are expecting higher prices for the rest of the year. Consumers expect inflation to run at a rate of 5.3% during the next year and to 3.1% for the next five years.
Still, the surveys highlight consumers are feeling more optimistic about longer-term inflation as well as continued strength in the labor market.
Trying to fight inflation, the Federal Reserve just announced a historic rate hike of 75 basis points last week and signaled further increases by either 50 or 75 basis points in July.