With consumers experiencing some relief due to the early-month easing in gasoline prices, the University of Michigan released a report on Friday showing a bigger than expected rebound in US consumer sentiment in the month of June.
The University of Michigan said its consumer sentiment index jumped to 48.9 in June after slumping to 44.8 in May. Economists had expected the index to rise to 46.0.
With the bigger than expected increase, the consumer sentiment index regained ground after hitting its lowest reading on records going back to 1952.
The report also said the current economic conditions index climbed to 48.4 in June from 45.8 in June, while the index of consumer expectations shot up to 49.3 in June from 44.1 in May.
"Overall, assessments and expectations of personal finances and business conditions all rose this month," said surveys of consumers director Joanne Hsu. "Even with June's early gains, however, views of the economy are still relatively dour."
"Sentiment is currently 13% below January 2026 and 19% below a year ago, as consumers remain focused on kitchen table issues," she added. "They feel burdened by the recent escalation in inflation and worry that higher inflation could remain stubborn going forward, particularly in the short run."
The University of Michigan said year-ahead inflation expectations dipped to 4.6% in June from 4.8% in May, although the reading substantially exceeds the 3.4% seen prior to the start of the Iran conflict in February.
Long-run inflation expectations tumbled to 3.4% in June from 3.9% in May but remain notably higher than the 2.8 to 3.2% range seen in 2024, the report said.
