US consumer sentiment perked up in early June as households cheered the reopening of businesses and a surprise rebound in staff hiring, though they did not expect a significant improvement in the economy amid fears of a resurgence in Covid-19 infections.
The survey from the University of Michigan is broadly in line with economists’ expectations that the US' recovery from recession would be a long slog.
The National Bureau of Economic Research, the arbiter of US recessions, declared last Monday that the economy slipped into recession in February.
“While uncertainty about the future is beginning to ease, it is still higher than it was at anytime during the Great Recession,” said Joel Naroff, chief economist at Naroff Economics in Holland, Pennsylvania. “That raises questions about the willingness to purchase big-ticket items. If we don’t see that happen, the recovery will be slower than hoped for.”
In addition to concerns about a second wave of Covid-19 infections, consumers also worried that persistently high unemployment could slow the economic recovery. Though the economy created 2.5 million jobs in May, an employment gap of nearly 20 million remains since March. Layoffs are more than double their peak during the 2007-09 recession.