The University of Michigan’s monthly consumer sentiment survey has shown a slight increase in optimism, with the Consumer Sentiment Index rising to 61.8 in July, surpassing analyst expectations. However, this uptick is tempered by concerns about inflation, which remains a top worry for many Americans.
According to Surveys of Consumers Director Joanne Hsu, the results are “little changed” from June, with high-wealth consumers showing a different trend. The Current Economic Conditions Index rose 3.1 points to 66.8, while the Consumer Expectations Index remained down 14.8% from last year.
Inflation expectations have also decreased, dropping for the second straight month to 4.4%, marking the lowest reading since February 2025. Long-run inflation expectations fell for a third consecutive month to 3.6%. Despite this, concerns about price increases remain high, with respondents expressing worries that trade policy moves could reignite inflation.
The uptick in consumer confidence is at odds with recent economic data showing robust retail sales and resilient labor markets. Respondents reported little impact from legislative developments such as tax and spending bills on their overall sentiment. Ultimately, consumers are unlikely to regain confidence unless they feel assured that inflation will not worsen.
This month’s survey highlights the ongoing disconnect between consumer perceptions and macroeconomic trends. As one respondent noted, it is only when trade policy stabilizes for the foreseeable future that consumers may regain confidence in the economy.
Source: https://fortune.com/2025/07/18/university-michigan-july-consumer-sentiment-survey-best-five-months