There were no surprises in the Michigan Consumer Survey published this morning.  The overall index increased to 70.8 in June, from May's 68.2.  This figure was the highest since September of last year.  However, the increase was mainly driven by the Present Conditions index, which includes the rally that we have seen in the equity market.  In fact, the Expectations index actually declined slightly to 69.2, from 69.4, indicating that consumers remain doubtful.  The decline in June reversed a three month increase which had begun in March.

The lower expectations index, combined with higher savings rate that we saw in the personal income report, indicate a slower recovery in consumption.