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4d ago

US Consumer Sentiment Climbs to 60.5 as Tariff Worries Ease

Inflation expectations fell to their lowest levels in months following tariff rollbacks during a 90-day trade negotiation period

A woman shops for lettuce at the Mid-Ohio Market at Norton, a modern food pantry designed to replicate a grocery store experience, in Columbus, Ohio, U.S., May 13, 2025. REUTERS/Evelyn Hockstein/File Photo
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American consumers appear to have settled a little after the extremely high tariffs announced in April.
Diners at a restaurant in Philadelphia on May 22, 2025.

Overview

  • The University of Michigan’s consumer sentiment index rose 16% in June to 60.5, marking the first gain after six months of declines and beating economist forecasts.
  • One-year inflation expectations plunged from 6.6% in May to 5.1% in June while five-year projections edged down to 4.1%, signaling reduced concern over tariff-driven price pressures.
  • President Trump’s administration eased some April tariffs and launched a 90-day negotiation window, with progress in talks—especially with China—helping to restore consumer optimism.
  • Recent data from the Bureau of Labor Statistics showed the consumer price index increased just 0.1% in May, underlining mild inflation despite elevated duties on imports.
  • Despite the rebound, sentiment remains about 20% below its December 2024 level and consumers continue to voice guarded views on future business conditions and personal finances.