Consumers are beginning to feel a little bit better about the economy, according to the preliminary results of the June consumer sentiment survey conducted by the University of Michigan’s Institute of Social Research.
The monthly tracking of consumer attitudes improved for the first time in six months, climbing 16% from May’s results. But the survey found that attitudes remain about 20% below the sentiment level from December 2024, when consumers were feeling more positive following the presidential election.
At least 500 telephone interviews with consumers across the country were compiled to create the monthly report. The findings are used to build the consumer confidence index, which is benchmarked to a value of 100 equaling the sentiment in the first quarter of 1966.
The June index reached 60.5, up from May’s reading of 52.2. However, June was still down 11.3% year over year. The index for current economic conditions rose to 63.7, which is 4.8 points higher than May’s numbers but down 3.3% from a year ago.
The index for consumer expectations increased 21.9% from May’s dismal reading to 58.4. However, it decreased 16.1% compared to June 2024.
The uptick in attitude was found across age, income and wealth groups, as well as political parties and geographic regions, according to the survey. All the index components rose, with a particularly steep increase for short- and long-run expected business conditions. This is consistent with a perceived easing of pressures from tariffs, the report explained.
“Consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April and the policy volatility seen in the weeks that followed,” said Institute Director Joanne Hsu in a statement. “However, consumers still perceive wide-ranging downside risks to the economy.”
Despite the improvements in June, Hsu found that consumer views on business conditions; personal finances; buying conditions for big-ticket items, such as homes; labor markets and stock markets remained well below levels seen six months ago in December 2024.
The good news is that inflation expectations for the next 12 months fell from 6.6% in May to 5.1% this month. Long-run inflation expectations fell for the second consecutive month, down slightly from 4.2% in May to 4.1% in June. Hsu wrote that both readings are the lowest in three months.
While the concern that tariffs will spur inflation has eased somewhat in June, inflation expectations remain above readings seen in the second half of 2024. Hsu maintains that such results reflect widespread beliefs that trade policy may still contribute to an increase in inflation in the months ahead.
