Consumer Sentiment Still Broadly Negative Despite Small Improvements in July

The mood of consumers improved for a second consecutive month in July, though it remains worse than it was in December, according to the latest installment of the University of Michigan’s Surveys of Consumers, released Friday (Aug. 1).

The rise in July from June was measured at 1.6%, stepping up to 61.7 from 60.7, according to the report.

Consumer sentiment remains 17% below the December 2024 mark but has rebounded 18% from its lowest point in April this year, according to a table released in conjunction with the report.

Within the index, current conditions rose about 5% in July to its highest reading since February 2025, although still 9% below the December mark, according to another table. According to the report, stockholders contributed positively to this increase.

Expectations dipped a slight 0.7% and remain 21% below the December mark, according to a third table.

“Although recent trends show sentiment moving in a favorable direction, sentiment remains broadly negative,” Surveys of Consumers Director Joanne Hsu said in the report. “Consumers are hardly optimistic about the trajectory of the economy, even as their worries have softened since April 2025.”

Year-ahead inflation expectations fell for a second straight month, from 5.0% last month to 4.5% this month. They peaked in May at 6.6%. This is the lowest reading since February 2025 but above the 2.8% registered in December, according to a table.

Long-run inflation expectations receded for the third consecutive month, falling back from 4.0% in June to 3.4% in July. This is the lowest reading since January 2025 but, again, still higher than the December 2024 reading of 3.0%, per the table.

The Conference Board reported Tuesday (July 29) that its Consumer Confidence Index rose by 2 points to 97.2 in July, up from a revised 95.2 in June.

The Expectations Index, which gauges consumers’ short-term outlook, improved by 4.5 points to 74.4, although it remained below the recession threshold of 80 for the sixth month in a row.

The Present Situation Index, which reflects current business and labor market conditions, declined by 1.5 points to 131.5, according to The Conference Board.

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