Consumer sentiment improved for the first time in six months, climbing 16% from last month but remaining about 18% below December 2024, when sentiment had exhibited a post-election bump.
These trends were unanimously visible across age, income, wealth, political party and geographic region. Improvements in June were seen across multiple dimensions of the economy, consistent with a perceived easing of pressures from tariffs, said economist Joanne Hsu, director of the University of Michigan's Survey of Consumers.
However, consumers are hardly optimistic about the economy; views have not recovered from the steep declines seen this year. While they are no longer bracing for a worst-case scenario for the economy, consumers continue to expect an economic slowdown to come.
"Consumers feel they have some breathing room given that the historically high tariffs announced earlier this year have not been sustained, and the worst-case scenarios for the economy have not come to fruition," Hsu said. "However, consumers still worry that higher inflation and an economic slowdown are on the horizon, and they remain very cautious. At this time, they are not connecting Middle East developments to the economy."
Outlook for labor markets improves but remains downbeat
Labor market expectations improved this month but also remain considerably worse than at the beginning of the year. About 57% of consumers expect unemployment to rise in the year ahead, down from 66% in March but still much higher than the 40% seen in December 2024.
Expectations for consumers' own income growth improved modestly this month, but June readings are worse than six months ago. Expectations for personal finances soared 17% from near historic lows in May but are 17% below December 2024, Hsu said.
Thus, while consumers feel modestly more secure about their incomes this month than in May, they have not regained the kind of confidence over their personal finances that would support robust spending.
Tariffs continue to shape consumers' views of the economy
Beliefs about the anticipated effects of tariffs have shaped consumers' views of the economy this year, and this month's results are no different. In June, about 59% of consumers provided unsolicited comments about tariffs, down from 66% last month but marking three consecutive months a majority of consumers did so.
According to Hsu, this month saw a modest reduction in the share of consumers who spontaneously cited tariffs as a negative factor for buying durable goods or cars, both of which improved this month but remain worse than last December.
The share of consumers expecting business conditions to worsen in the year ahead fell from 64% in May but now stands at a still-high 55%, compared with just 29% in November 2024.
Consumer Sentiment Index
The Consumer Sentiment Index rose to 60.7 in the June 2025 survey, up from 52.2 in May and below last June's 68.2. The Current Index rose to 64.8, up from 58.9 in May and below last June's 65.9. The Expectations Index rose to 58.1, up from 47.9 in May and below last June's 69.6.
About the surveys
The Surveys of Consumers is a rotating panel survey at the University of Michigan Institute for Social Research. It is based on a nationally representative sample that gives each household in the coterminous U.S. an equal probability of being selected. Interviews are conducted throughout the month by web. The minimum monthly change required for significance at the 95% level in the Sentiment Index is 4.8 points; for the Current Index and Expectations Index, the minimum is 6 points.
