Consumer Sentiment Down Sharply

In perhaps an early indication of a U.S. Brexit effect, the consumer sentiment flash for July is down a sharp 4.0 points to 89.5. Weakness is centered in the expectations component which fell 5.3 points to 77.1 for one of the very weakest readings of the last two years. Weakness in expectations ultimately points to doubts over the jobs outlook.

The assessment of current conditions is more optimistic, at 108.7 for a 2.1 point dip but still one of the strongest readings over the last year. Year-ahead inflation expectations are also a positive in the report, up 2 tenths to 2.8 percent with 5-year expectations, however, unchanged at a very low 2.6 percent.

Recent History Of This Indicator:
July's consumer sentiment index flash will offer an early reading of the effect, if any, from the Brexit vote. Forecasters see the flash holding unchanged at June's 93.5. This index has been very solid this year reflecting confidence in the jobs market. A plus for the June report was an uptick in inflation expectations, readings that are closely watched by policy makers.