Consumer Sentiment Rebounds,But Concerns Linger

Updated June 15,2025
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U.S. ⁤consumer sentiment showed a moderate rebound in early June,according to preliminary data,but overall attitudes remain below levels⁢ seen before tariff increases earlier this year. The consumer confidence index,while improved,indicates lingering unease⁢ about the economy.

The University of Michigan’s Surveys of Consumers reported that its preliminary June data showed a 16% improvement in consumer sentiment compared to May. Though, the index remains 18% below its December peak.The headline ⁢reading for June came in at 60.5, up from 52.2 in May.

“These trends ‍were unanimous‍ across ⁣the distributions of age, income, wealth, political party, and geographic region,” Joanne Hsu, Surveys of consumers director, said in a statement.

The Expectations sub-index,⁢ reflecting ⁢consumers’⁤ outlook, showed ⁤the ⁤most⁤ meaningful improvement, rising 22% from May. However, it⁢ remains 20% below December levels. The Current conditions sub-index, which measures consumers’ assessment of the present economic situation, rose 8% but is still ⁢15% below the December mark.

Hsu noted a “particularly steep increase for short- and ⁤long-run expected business conditions,consistent with a perceived easing of pressures from tariffs.”

Inflation expectations, a ⁤key factor influencing consumer sentiment, saw some easing in June.⁢ Year-ahead inflation expectations decreased from 6.6% last month ⁤to 5.1% this month. Five-year inflation expectations also fell, standing at ⁤4.1% in June. While both readings are‍ the lowest in three months, they remain above levels seen‍ in the previous 12 months.

The volatility in⁣ prices continues to impact the paycheck-to-paycheck economy. A recent study found a decline in the percentage of consumers identifying as⁤ “planners,” those ⁣able to stick to their financial goals, suggesting increased ⁣financial‍ strain for many Americans. Household ⁤finances are still a ‍major concern.

Data from the Bureau of Labor Statistics indicated that the impact of‍ tariffs on the Consumer Price Index (CPI)⁣ was benign in May. The CPI increased 0.1% month over month,below April’s 0.2% increase. On an annualized basis, the yearly CPI rose 2.4% in⁤ May.

“Despite this month’s notable improvement, consumers remain guarded and concerned about the trajectory of the economy,” Hsu said.

What’s next

Economists will be closely watching upcoming economic data to see if the rebound in consumer sentiment⁤ continues or if lingering concerns about tariffs⁣ and inflation will dampen future outlooks. The economy’s performance in ‍the coming months will be crucial in shaping consumer attitudes.