Consumer Sentiment sinks even lower

The University of Michigan's Consumer Sentiment survey that was released today sank to 56.4 down from 59.8 in May. This is the third lowest reading ever for the survey that goes back to 1952. During the recession of 1980, the index hit 52.7 in April of 1980 and 51.7 in May of 1980. At the end of the 1973-75 recession, the index hit 57.6.

Here are a few highlights from their press release:

• Surging gas prices, high food prices, disappearing jobs, declining home values, and record foreclosures were cited by consumers as the basis for their pessimism, and most consumers expected each of these problems to continue to worsen in the months ahead.
• More consumers than any time since the first survey was conducted in 1946 reported that their financial situation had worsened (57%). When asked to explain the changes in their finances, the highest number of consumers cited higher prices for fuel and food, and the smallest number of consumers reported income gains than at any other time in the history of the surveys.
• Nine-in-ten consumers thought that the economy was in recession in June, with record numbers citing unfavorable news about rising prices, lost jobs, slowing economic growth, and the continuing fallout from the credit and housing crises. “Perhaps the most significant development in the past few months is that two-thirds of all consumers now expect the economic slump to extend into the next several years.

While we may not be officially in a recession, the consumers are feeling pinched as if we are in a deep recession.

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