The Michigan sentiment drop to 94.5
The Michigan sentiment drop to 94.5 from 97.1 in May left the weakest level since November's 93.8, and a larger gap to the 13-year high of 98.5 in January. Michigan sentiment remains well above the 2-year low of 87.2 in October. The pattern of upward revisions in "final" Michigan reports is gone, given boosts in just 10 of the last 23 months. Analysts expect consumer confidence to fall modestly to 117.0 in June from 117.9 in May, versus a 16-year high of 124.9 in March but a lower 116.1 prior high in February. The IBD/TIPP index fell to 51.3 in both May and June from 51.7 in April, versus a 56.4 cycle-high in February. The weekly Bloomberg Consumer Comfort index has slipped to a 50.0 average in the first two weeks of June from a 50.4 average in April and a 50.6 cycle-high average in both March and April. Despite Q2 pull-backs, confidence, producer sentiment and small business optimism have soared since October alongside a factory rebound that should trim excess capacity, a flooring in inventories, gains for equity and home prices, lean energy costs, and hopes for tax cuts and stimulus spending.