Consumer sentiment rose sharply in June, according to data released Friday by the University of Michigan, as Americans reported improving views of both current economic conditions and future prospects.
The Index of Consumer Sentiment climbed to 60.7, up from 52.2 in May, a 16.3 percent increase that marked the first gain in six months. The index remains 11 percent below its June 2024 level and roughly 18 percent lower than its recent peak in December 2024, following the presidential election.
“Sentiment improved across a range of economic aspects, including expectations for personal finances and business conditions,” said Surveys of Consumers Director Joanne Hsu, noting that the gains were broad-based. The index measuring current economic conditions rose 10 percent to 64.8, while the index of consumer expectations jumped 21.3 percent to 58.1.
Despite the rebound, overall sentiment remains consistent with consumer expectations of a slowing economy and elevated inflation risks, Hsu said.
Inflation expectations moderated in June. The year-ahead inflation outlook fell to 5.0 percent from 6.6 percent in May. Long-run inflation expectations declined to 4.0 percent from 4.2 percent, the second consecutive monthly drop and the lowest level since February. Still, both short- and long-term expectations remain above where they stood for most of the second half of 2024.
Consumers reported slightly less concern about the inflationary effects of tariffs, though the University of Michigan said worries about inflation risks remain elevated. Respondents did not appear to link recent instability in the Middle East to the U.S. economic outlook.
The preliminary reading for July sentiment is scheduled for release on July 18 at 10 a.m. ET.