US consumer sentiment rebounded, before Iran fighting resumed
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The news: A University of Michigan survey showed US consumer sentiment in July rose to its highest level since before the war with Iran, as petrol prices fell during the ceasefire.
The numbers: The survey’s consumer sentiment index climbed 10% to 54.4, while its measure of current economic conditions surged 19.3% to 54.9.
Consumers’ assessments of whether it was a good time to buy major household items improved 20%, as did their expectations for business conditions over the next year.
Year-ahead inflation expectations eased to 4.2%, but remained historically high and well above the 3.4% recorded in February, before the Iran conflict began.
Long-term inflation expectations were unchanged from last month at 3.3%, compared with a range of 2.8% to 3.2% in 2024.
The context: The University of Michigan conducted the survey between June 23 and July 13, with more than two-thirds of interviews completed before the US resumed strikes against Iran and petrol prices began rising again.
What they said: “With prices remaining frustratingly high, consumers are hardly ebullient about the economy; sentiment is down 12% from a year ago. Thus, sentiment’s upward momentum may prove difficult to sustain if recent declines in gas prices continue to reverse course,” Surveys of Consumers director Joanne Hsu said.
The source: University of Michigan
