U.S. consumers are beginning to see the light at the end of the tunnel.

A closely watched consumer sentiment index rose 10.5% during June, according to final survey results unveiled Friday by the University of Michigan.

Consumers’ assessments of current economic conditions saw a 4.1% improvement over the month, while the university’s index tracking future economic expectations climbed 15%.

Still, the overall consumer sentiment reading of 49.5 is 18.5% below last year’s mark of 60.7, with the index tracking current economic conditions down 26.4% year over year and the consumer expectations metric down 12.7% from June 2025.

“Consumer sentiment confirmed its early-month reading, rising about 10% above May as gas prices moderated,” Joanne Hsu, director of Surveys of Consumers at the university, wrote in an analysis. “Increases were seen across income, wealth and political affiliation.”

Drilling down, Hsu observed that expected business conditions over a five-year time horizon spiked 16% “as consumers’ worries over long-term consequences of the Iran conflict appear to be easing.”

Inflation outlooks among consumers also brightened, with year-ahead inflation expectations ticking down from 4.8% in May to 4.6% this month. But that’s still a far cry from the 3.4% projection reported in February before the war in Iran began.

The global energy shock caused by the Middle East conflict has hit U.S. consumers hard at the gas pump and has trickled through to other everyday expenses. On Thursday, the Bureau of Economic Analysis reported that the personal consumption expenditures price index rose 4.1% in May, its largest annual increase since April 2023.

Largely due to inflationary pressures, the University of Michigan’s consumer sentiment index now sits 13% below its February reading taken prior to the start of the Iran war.

“The cost of living remains at the forefront of consumers’ minds,” Hsu wrote. “For the third straight month, over half of consumers spontaneously mentioned that high prices are weighing down their personal finances.”