Consumer sentiment improves as gas hikes ease; inflation a growing concern
Consumer sentiment rebounded in June as gas prices moderated but it remains nearly 30% below a year ago.
The Index of Consumer Sentiment in June snapped a three-month stretch of declines, rising to 49.5 from 44.8 in May, according to the University of Michigan Survey of Consumers. The index measuring consumer expectations surged 15%, rising to 50.7, up from 44.1 in May, as consumers' worries over long-term consequences of the Iran conflict appeared to be easing. The index for current conditions inched up 4.1% to 47.7, up from 45.8
"While consumers certainly welcomed the recent decline in gas prices, the persistence of high prices overall continues to weigh on their budgets," said U-M economist Joanne Hsu, director of the surveys. "Consumers remain quite worried about the prospect of inflation eroding their living standards in the year ahead."
Consumers more worried about inflation than unemployment
The surveys asked consumers whether inflation or unemployment posed greater risks to consumers in the year ahead. In recent months, a rising share of consumers identified inflation as the greater potential problem.
At the start of the year, 23% reported that inflation would be the greater challenge, 14% chose unemployment, and the remainder said both equally, according to Hsu. This month, however, a substantial 36% now chose inflation — the highest since February 2025 — while only 7% reported unemployment.
Personal finances improve, still generally negative
While current assessments of personal finances and year-ahead expectations rose, both readings are still well below those seen at the beginning of 2026 as the cost of living
remains at the forefront of consumers' minds, Hsu said. For the third straight month, over half of consumers spontaneously mentioned that high prices are weighing down their personal finances.
Soaring stock markets are buoying personal finances, but only for consumers with the largest stock portfolios, Hsu added.
About the surveys
The Surveys of Consumers is a rotating panel survey at the University of Michigan Institute for Social Research. It is based on a nationally representative sample that gives each household in the coterminous U.S. an equal probability of being selected. Interviews are conducted throughout the month by web.
