University of Michigan sentiment (preliminary) for July 61.8 versus 61.5 estimate

• Prior month 60.7
• University of Michigan consumer sentiment 61.8 versus 61.5 estimate.
• Expectations index 58.6 versus 55.0 estimate. Prior month 58.1
• Current conditions index 66.8 versus 63.9 estimate. Prior month 64.8.

Surveys of Consumers Director Joanne Hsu said consumer sentiment was little changed in July, inching up just one point to 61.8, its highest reading in five months but still 16% below December 2024 and well under historical norms. Short-run business conditions rose 8%, yet expected personal finances fell 4%, signaling uneven consumer perceptions. Hsu emphasized that consumer confidence is unlikely to recover unless inflation fears subside—something that could be aided by a more stable trade policy environment. She added that recent policy moves, such as the tax and spending bill, appeared to have little impact on sentiment.

Inflation expectations showed improvement, but risks remain. Year-ahead inflation expectations dropped sharply from 5.0% to 4.4%, while long-run expectations eased to 3.6% from 4.0%, both now at their lowest since February 2025. However, both are still above December 2024 levels, suggesting that consumers continue to perceive meaningful risk of inflation reaccelerating.

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