U.S. Consumer Sentiment Reaches Five-Month High In July

(RTTNews) - After reporting a substantial rebound by U.S. consumer sentiment in the previous month, the University of Michigan released a report on Friday showing a more modest improvement by consumer sentiment in the month of July.

The University of Michigan said its consumer sentiment index climbed to 61.8 in July after surging to 60.7 in June. Economists had expected the index to rise to 61.5.

With the slightly bigger than expected increase, the consumer sentiment index reached its highest level since hitting 64.7 in February.

"While sentiment reached its highest value in five months, it remains a substantial 16% below December 2024 and is well below its historical average," said Surveys of Consumers Director Joanne Hsu.

She added, "Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen, for example if trade policy stabilizes for the foreseeable future."

The report also said the current economic conditions index rose to 66.8 in July from 64.8 in June, while the index of consumer expectations inched up to 58.6 in July from 58.1 in June.

On the inflation front, the report said year-ahead inflation expectations fell for a second straight month, plunging to 4.4 percent in July from 5.0 percent in June.

Long-run inflation expectations receded for the third consecutive month, falling to 3.6 percent in July from 4.0 percent in June.

"Both readings are the lowest since February 2025 but remain above December 2024, indicating that consumers still perceive substantial risk that inflation will increase in the future," said Hsu.