Consumers continue to show a stiff upper lip to the macro concerns we all obsess about. The preliminary UoM confidence figure was 1 pt better than expected at 75.5, up from 73.6 in May and it’s at the highest level since Jan ’08. It also follows the improvement over the past few weeks seen in the weekly ABC poll. Both Current Economic Conditions and the Economic Outlook rose by 1.9 pts and one year inflation expectations fell to 2.7% from 3.2% in May. It’s now back to the level last seen in March and there is likely nothing like a drop in gasoline prices to shift inflation expectations. After peaking at $2.93 per gallon on average according to AAA on May 5th, they are down to $2.70 last night, the lowest since March. As mentioned earlier with May retail sales, taking out auto’s, gasoline and building materials, sales were UP .1%, thus much better than the headlines read.
