U.S. Consumer Sentiment Climbs
Consumer sentiment rose 16% in June, breaking a six-month slump, but remains below post-election highs as inflation concerns and tariff fears persist.
WASHINGTON — Consumer sentiment surged 16% from May in its first increase in six months – confirming the mid-month reading – but remains well below the post-election bounce seen in December 2024.
The improvement was broad-based across numerous facets of the economy, with expectations for personal finances and business conditions climbing about 20% or more.
Despite June’s gains, however, sentiment remains about 18% below December 2024, right after the election; consumer views are still broadly consistent with an economic slowdown and an increase in inflation to come. Consumers continue to be concerned about the potential impact of tariffs, but at this time they do not appear to be connecting developments in the Middle East with the economy.
Year-ahead inflation expectations plummeted from 6.6% last month to 5.0% this month. Long-run inflation expectations receded for the second straight month, falling back from 4.2% in May to 4.0% in June. Both readings are the lowest in three to four months.
Consumers’ fears about the potential impact of tariffs on future inflation softened somewhat in June. Still, inflation expectations remain above readings seen throughout the second half of 2024, reflecting widespread beliefs that risks to inflation have not fully abated.
Source: University of Michigan, Surveys of Consumers
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