Preliminary indicators of consumer sentiment in June showed slightly brightening outlooks as the Iran war progressed into its fourth month.

Easing gas prices at the beginning of June had consumers “experiencing some relief” concerning household budget pressures, according to the University of Michigan, which updated its closely watched Index of Consumer Sentiment on Friday.

The index ticked up nearly four points, landing 9% higher over the month but remaining more than 19% lower than a year ago and 13% lower than January.

Improvements in sentiment were broad-based, the report said, though lower-income consumers showed “particularly strong” brightening, attributable to the fact that higher gas prices erode a disproportionate share of that income group’s budget space.

“Overall, assessments and expectations of personal finances and business conditions all rose this month,” Joanne Hsu, director of Surveys of Consumers at the university, commented in the report. She noted that “views of the economy are still relatively dour” among consumers broadly, however, despite June’s early gains.

“They feel burdened by the recent escalation in inflation and worry that higher inflation could remain stubborn going forward, particularly in the short run,” added Hsu. Interviews for the latest survey were conducted between May 19 and June 8.

While the consumer price index rose to 4.2% on a yearly basis in May — its quickest annual growth rate since early 2023, according to government estimates — CPI growth decelerated on a monthly basis, from 0.6% in April to 0.5% last month.

Inflation slowed in May across a series of household spending categories, including grocery prices and shelter costs, even as the gasoline index rose 7% compared to 5.4% in April. Though still 3.1% higher than a year ago in May, the food index retreated slightly from April’s 3.2% annual growth rate.

When excluding volatile food and energy prices, core CPI also decelerated from April to May, indicating that months of elevated energy costs have nevertheless been somewhat contained and slow to trickle through as higher longer-term inflation pressure.

Coincidentally, respondents to the university’s latest survey reported easing inflation expectations over the long run.

“Year-ahead inflation expectations inched down from 4.8% in May to a still-elevated 4.6% this month,” said Hsu. “The current reading substantially exceeds the 3.4% reading seen in February 2026 prior to the start of the Iran conflict, along with all 2024 readings.”