Consumer Sentiment: Modest Headline Decline, But Big Drop Since Comey

June 16, 2017
Bottom Line: Consumer sentiment fell modestly in the headline June survey, but the survey's economist revealed a sharp drop in sentiment data collected since June 8th, corresponding with James Comey's testimony. While the survey notes that only a few consumers volunteered that the testimony was impacting their sentiment, the loss in confidence was larger among self-identified Republicans than among Democrats. Recall that since the election a major partisan divide was behind the strength in sentiment, with Republicans dramatically more optimistic than Democrats. Finally, the survey noted: "The recent erosion of confidence was due to more negative perceptions of the proposed economic policies among Democrats and the reduced likelihood of passage of these policies among Republicans." Overall, consumer sentiment remains volatile and heavily driven by political views, which may be one reason there has been less flow through to retail sales than typical. Consumer Sentiment FELL by 2.6 points in early June to 94.5%, compared with market expectations for a decrease to 97.0%. Despite this month's modest decline, sentiment is now 1.1% ABOVE its year ago level. Current Conditions FELL by 2.1 points to 109.6%. This is 1.1% BELOW their year ago level. Consumer Expectations FELL by 3.0 points to 84.7%. Despite this month's modest decline, expectations are 2.8% ABOVE its year ago level.