U.S. consumer sentiment rises, but cost-of-living worries remain high

The University of Michigan’s final June consumer sentiment reading rose to 49.5 from 44.8 in May, a sharp rebound from record lows that still left households deeply uneasy about prices. Joanne Hsu, who directs the survey, said the cost of living remained at the forefront of consumers’ minds, even as the mood improved across income, wealth and political affiliation.

The Current Economic Conditions index climbed to 47.7 from 45.8 in May, while the Index of Consumer Expectations advanced to 50.7 from 44.1. Sentiment was up about 10.5% from May, and expected business conditions over the next five years surged 16%, partly on easing worries about the long-term consequences of the Iran conflict.

Even so, the June reading stayed well below healthier levels. Sentiment remained 13% below the February 2026 reading before the Iran conflict began and nearly 20% below a year earlier. Interviews for the final June release were completed between May 19 and June 8, so the data mostly captured early-month relief, including a preliminary June reading of 48.9 before the final revision to 49.5.

Inflation anxiety also stayed high. Year-ahead inflation expectations edged down to 4.6% from 4.8% in May, while long-run inflation expectations fell to 3.3% from 3.9%. Even with that easing, the numbers remained above the 2.8% to 3.2% range seen in 2024.

More than half of consumers, for the third straight month, spontaneously mentioned high prices as weighing on their personal finances. Lower-income consumers posted a particularly strong improvement in sentiment, helped by easing gasoline prices in early June, but the broader picture remained one of caution. Households may be less pessimistic than they were in May, yet rent, groceries, insurance and childcare still define the daily burden of inflation.

The next University of Michigan consumer sentiment release is scheduled for Friday, July 17, 2026.