Overview
- The University of Michigan’s preliminary Consumer Sentiment Index climbed to 54.4 in the July reading released Friday, the highest level since February.
- Survey director Joanne Hsu said falling gasoline prices in late June and early July were the main driver of the increase across age, income and political groups.
- More than 70% of the survey interviews were completed before the collapse of a U.S.-Iran ceasefire that later pushed oil and gasoline prices higher, making the rise fragile.
- Consumers’ one-year inflation expectations eased to 4.2% from 4.6% in June while five-year expectations held at 3.3%, but overall sentiment remains about 12% below last year.
- The move matters because changes in fuel costs quickly sway public mood and could affect spending if higher energy prices feed into wages and broader inflation that the Federal Reserve watches.