A new survey by the University of Michigan shows that consumer sentiment has rebounded significantly, with a reading of 60.5 for the headline index, exceeding Dow Jones estimates and soaring 15.9% from last month. The one-year outlook on inflation has also dropped to 5.1%, its lowest level since 1981.
The survey indicates that consumers’ pessimistic views about the economy have improved as progress is seen in the global trade war. However, respondents still perceive significant downside risks to the economy and worry about the impact of tariffs on prices.
Inflation expectations remain above pre-pandemic levels, with a five-year view at 4.1%. The softening of inflation concerns coincides with reduced rhetoric from President Trump’s administration and a 90-day negotiation period that appears to be showing progress, particularly with China.
Survey director Joanne Hsu noted that consumers have settled somewhat from the shock of high tariffs but still perceive risks. Despite this, the Michigan survey offers a more optimistic view than other sentiment and market indicators, which showed contained inflation fears despite tariff tensions.
Source: https://www.cnbc.com/2025/06/13/consumer-sentiment-reading-rebounds-to-much-higher-level-than-expected-as-people-get-over-tariff-shock.html