U.S. consumer sentiment staged a stronger-than-anticipated recovery in June, buoyed by declining gasoline prices early in the month, according to data released Friday by the University of Michigan.
The university’s consumer sentiment index climbed to 48.9 from May’s 44.8, surpassing the consensus forecast of 46.0. The increase pulls the gauge off its lowest level since records began in 1952.
Both sub-indices improved markedly. The current economic conditions index rose to 48.4 from 45.8, while the index of consumer expectations jumped to 49.3 from 44.1.
“Overall, assessments and expectations of personal finances and business conditions all rose this month,” said Joanne Hsu, Director of Surveys of Consumers. “Even with June’s early gains, however, views of the economy are still relatively dour.”
Hsu noted that sentiment remains 13% below January levels and 19% lower than a year ago, as households remain focused on kitchen-table pressures. “They feel burdened by the recent escalation in inflation and worry that higher inflation could remain stubborn going forward, particularly in the short run,” she added.
Year-ahead inflation expectations eased to 4.6% from 4.8% in May, though they remain well above the 3.4% recorded before the February escalation of the Iran conflict. Long-run inflation expectations fell to 3.4% from 3.9% but continue to exceed the 2.8%–3.2% range observed throughout 2024.