Consumers appear to be feeling more hopeful as summer begins and tariffs remain relatively low impact at the moment, according to the latest data from the University of Michigan.
The final results for the Index of Consumer Sentiment came in at 60.7, a 16% leap above May’s reading of 52.2, and slightly above the preliminary results of 60.5. The final results confirmed the mid-month result of this index seeing its first increase in six months.
“The improvement was broadbased across numerous facets of the economy, with expectations for personal finances and business conditions climbing about 20% or more,” said Surveys of Consumers Director Joanne Hsu.
Sentiment, however, is still down by 11.0% year-over-year, and down 18% from December 2024 when it had leaped post-election, as Hsu said that “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,” she continued.
June’s data also comes in contrast to the latest Consumer Confidence reading from The Conference Board, which fell by 5.4 points.
The index of Current Economic Conditions came in at 64.8, up 10% from 58.9 in May and up from 63.7 seen in the preliminary results. The index is also only down by a narrow 1.7% year-over-year.
The Index of Consumer Expectations registered at 58.1, leaping an impressive 21.3% from 47.9 in May, but down slightly from the 58.4 seen in the preliminary results. Year-over-year the index is also down by 16.5%.
Year-ahead inflation expectations fell from 6.6% last month to 5% this month, down slightly from the 5.1% seen preliminarily. Long-run inflation expectations decreased for the second straight month from 4.2% in May to 4% in June, also down slightly from the 4.1% seen preliminarily. Both readings are the lowest in three to four months, confirming the preliminary results.
“Consumers’ fears about the potential impact of tariffs on future inflation softened somewhat in June,” Hsu said. “Still, inflation expectations remain above readings seen throughout the second half of 2024, reflecting widespread beliefs that risks to inflation have not fully abated.”
