Consumer sentiment improved this month amid a drop in gas prices and lower inflation expectations, according to the University of Michigan Surveys of Consumers. .June’s index of consumer sentiment increased 9.2 percent from May to 48.9, but was still down 19.4 percent from 12 months ago. The index tracking current economic conditions increased 5.7 percent to 48.4 from 45.8 in May, but was down 25.3 percent on an annualized basis. The index of consumer expectations increased 11.8 percent to 49.3 from 44.1 in May, but was down 15.1 percent from May 2025. “This measured improvement in sentiment was widespread, seen across age, education and political party,” said Director Joanne Hsu. “Lower-income consumers exhibited a particularly strong sentiment increase, consistent with the fact that gasoline comprises a larger share of their budgets.” The current national average gas price is $4.10, according to AAA, down from $4.50 in May. Year-ahead inflation predictions fell to 4.6 percent from 4.8 percent in May. June’s reading is still much higher than the 3.4 percent in February before the war in Iran began. Long-run inflation expectations fell to 3.4 percent this month from 3.9 percent in May, higher than the 2.8 percent to 3.2 percent range in 2024. Interviews for the report were done between May 19 and June 8. The Conference Board Consumer Confidence Index fell 0.7 points in May to 93.1. The index tracking consumer assessments of current business and labor market conditions fell 3.2 points to 121.2. The index measuring consumers’ short-term outlooks for income, business and labor market increased 1.0 points to 74.4.“Consumer appraisals of current business conditions and the current labor market were moderately less positive compared to last month,” said The Conference Board Chief Economist Dana Peterson. “This was somewhat offset by modest improvements in consumers’ expectations for business conditions and the labor market six months from now.”
