Consumer Sentiment Rises as Gas Prices Ease

Consumer sentiment rose approximately 9% in June 2026 as gasoline prices declined, according to preliminary results from the University of Michigan’s Surveys of Consumers. Director Joanne Hsu attributed the improvement to easing fuel costs, which provided the most significant relief to lower-income households.

The Index of Consumer Sentiment improved by about four index points compared to May. According to the report, this recovery was broad, with sentiment gains recorded across different age groups, education levels, and political parties.

Why did consumer sentiment rise in June 2026?

The University of Michigan attributed the June uptick to a drop in gas prices during the early part of the month. Hsu noted that the impact was not uniform across all income brackets.

Lower-income consumers exhibited a particularly strong sentiment increase, consistent with the fact that gasoline comprises a larger share of their budgets.

Joanne Hsu, Surveys of Consumers Director

How does current sentiment compare to historical lows?

The June improvement follows a period of historic decline. The index hit record lows in both April and May 2026, marking the lowest readings in the 73-year history of the Index of Consumer Sentiment.

University of Michigan data identifies gas price volatility and concerns regarding the war in the Middle East as the primary drivers of the April and May crashes.

Other industry data mirrors this trend. The Conference Board’s Consumer Confidence Index, released May 26, reported that war-related inflation and gas prices caused confidence to fall in May. The Conference Board noted that consumer write-in responses in May continued to skew toward pessimism, with an increase in references to oil and gas prices for two consecutive months.

What is the long-term outlook for consumer confidence?

Despite the June recovery, sentiment remains significantly lower than previous benchmarks. Hsu stated that June sentiment is 13% lower than it was in January 2026 and 19% lower than in June 2025.

Hsu reported that consumers remain focused on “kitchen table issues.”

They feel burdened by the recent escalation in inflation and worry that higher inflation could remain stubborn going forward, particularly in the short run.

Joanne Hsu, Surveys of Consumers Director

What are the current inflation expectations?

Preliminary June results show a slight dip in short-term inflation expectations. Consumers gauged year-ahead inflation at 4.6%, down from 4.8% in May.

This figure remains substantially higher than the 3.4% reading recorded in February 2026, which occurred before the start of the Iran conflict. Long-run inflation expectations for June were measured at 3.4%.