Consumer Sentiment in July: Things Are Looking Up
Consumer sentiment, also known as consumer confidence, measures how U.S. consumers feel about the economy, wages, jobs and their personal finances.
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Updated on Aug. 8.
New York Fed: Consumers concerned about prices, but overall outlook improves
The New York Fed’s Survey of Consumer Expectations for July, released on Aug. 8, shows inflation expectations rose, but households felt more positive about their finances.
Inflation: Median inflation expectations for the next year increased to 3.1% in July from 3% in June. The expectation that inflation would increase over the next three years was unchanged at 3%. Finally, expectations for inflation rising in the next five years increased to 2.9% from 2.6% in June.
Job security: The likelihood of the unemployment rate rising in the next year fell by 2.3 percentage points to 37.4% — the lowest since January. But Americans also said the chance of losing their job rose slightly from 14% to 14.4%.
Personal finance: Fewer Americans say their finances are worse off than a year ago or expect to be worse off a year from now, compared to last month.
University of Michigan: Index up for second month in a row
The University of Michigan’s Index of Consumer Sentiment increased in July for the second time after five months straight of declines — according to the final results for the month released on Aug 1.
The consumer sentiment index is up 1.6% from last month, but still down 7.1% compared with one year ago.
Month-over-month gains were also seen for Current Economic Conditions (up 4.9%), but the Index of Consumer Expectations was down (-0.7%).
The report found that consumer sentiment showed one divergence among Americans: Sentiment rose for those who own stock, but declined for those who do not.
Joanne Hsu, who directs consumer surveys at the University of Michigan, said in the survey release, “Although recent trends show sentiment moving in a favorable direction, sentiment remains broadly negative. Consumers are hardly optimistic about the trajectory of the economy, even as their worries have softened since April 2025.”
Conference Board: Confidence rises modestly
The Conference Board’s preliminary Consumer Confidence Index report for July (released July 29) saw a modest rise of 2.0 points from June’s revised figure of 95.2. The Present Situation Index, meanwhile, fell slightly and the Expectations Index rose.
“Consumer confidence has stabilized since May, rebounding from April’s plunge, but remains below last year’s heady levels,” said Stephanie Guichard, a senior economist at The Conference Board, in a press release.
Some key takeaways from the report:
Tariffs still top consumer concerns. “Consumers’ write-in responses showed that tariffs remained top of mind and were mostly associated with concerns that they would lead to higher prices,” Guichard said.
Confidence rises across most income groups. The report found that the rebound in consumer confidence was shared across all income groups — except those with annual household income below $15,000. Confidence rose among Republicans and remained stable for Democrats and independents.
Expectations Index still low. The Expectations Index, based on consumers’ short-term expectations for income, business and the job market, rose 4.5 points in July to 74.4, but remained below 80 for the sixth consecutive month. Figures below that threshold can signal a coming recession.
What is consumer sentiment?
Consumer sentiment, also known as consumer confidence, is an index of how U.S. consumers are feeling about the current and future state of the economy, and all that folds into the economy: the job market, wages, business conditions and their personal finances. It’s a valuable tool for economists, as consumer sentiment can be used as an early predictor of economic changes.
How people feel about the economy can directly impact the economy, because consumers' attitudes often affect how much they spend on things like food, transportation, household goods, entertainment and more.
In 2023, consumers’ personal spending made up 67.9% of the U.S. GDP, or gross domestic product, according to the Federal Reserve Bank of St. Louis. That’s a significant majority of the nation’s GDP, so keeping a close eye on consumer sentiment is key in foreseeing potential economic slumps or rallies.
When the economy is in a recession, consumer sentiment falls. On the flip side, when the economy is expanding, consumer sentiment rises. The index does typically peak before a recession, though.
Unlike other indexes, such as the Consumer Price Index (CPI), consumer sentiment isn’t calculated using spending data or hard figures. Instead, economists rely on two major surveys of consumer confidence: The University of Michigan’s Surveys of Consumers and the Conference Board’s Consumer Confidence Survey.
Each survey collects the general attitudes and opinions of hundreds of U.S. consumers. Then, those opinions are assigned numeric values and aggregated into one number, or index.
Most consumers set goals for 2025 — few are on track
Nearly all Americans — 90% — said they set financial goals for 2025, according to a new NerdWallet survey of over 2,000 adults, conducted online by The Harris Poll.
But some 45% say they’re not on pace to hit their biggest money goal or they’re unsure of their progress. Among those who set goals, more than 1 in 5 (22%) changed course on their original goals due to economic conditions.
If you’re among those who haven’t made progress toward the goals you set at the start of the year, you can turn things around.
Two-thirds of Americans (66%) say financial progress feels more attainable for them in the second half of 2025 than it has thus far.
Some additional findings from the survey:
57% of Americans are confused about how the current trade war could impact them.
60% of Americans feel good about their current financial situation.
34% of Americans are actively working on improving their finances in 2025
Learn more about how Americans’ financial goals for the year are shaping up.
What is consumer sentiment like right now?
The University of Michigan’s Index of Consumer Sentiment
The final reading for July from the University of Michigan released on Aug. 1 shows:
The Index of Consumer Sentiment registered at 61.7 for July, up from 60.7 for June.
Current Economic Conditions registered at 68 for July, up from 64.8 for June.
The Index of Consumer Expectations registered at 57.7 for July, down from 58.1 for June.
The Conference Board’s Consumer Confidence Index
Conference Board preliminary data for July, released on July 29, shows:
The Conference Board’s Consumer Confidence Index rose modestly (97.2) compared to June (95.2).
The Present Situation Index registered at 131.5, compared to 133 in June.
The Expectations Index increased to 74.4 in July from 69.9 in June.
The report notes that while some respondents mentioned the “big, beautiful bill” passed by Congress and signed by the president on July 4, “the bill and its implications were relatively low on the list of themes that consumers were focused on in July.”
The Federal Reserve Bank of New York’s Survey of Consumer Expectations
The highlights for July from the Federal Reserve Bank of New York’s Survey of Consumer Expectations released on Aug. 7 shows:
Inflation. Median inflation expectations increased by 0.1 percentage point to 3.1% for the one-year ahead horizon, held steady at the three-year horizon (3%) and increased 0.3 percentage point to 2.9% at the five-year horizon.
Commodity prices. Year-ahead price expectations decreased for multiple categories including gas (down 0.3 percentage point to 3.9%); medical care (down 0.1 percentage point to 9.2%); cost of college (down 0.4 percentage point to 8.7%) and rent (down 2.1 percentage points to 7%). Expectations for food prices over the next year were unchanged (5.5%) compared to the previous month.
Home price growth. Median year-ahead home price growth expectations held steady at 3%. Since August 2023, the range has moved between 3% and 3.3%.
Earnings expectations. Median one-year-ahead expectations for earnings growth went up by 0.1 percentage point to 2.6%, slightly below the 12-month average of 2.8%.
Unemployment expectations. The mean probability that the unemployment rate will increase a year from now decreased by 2.3 percentage points to 37.4% — the lowest reading since January.
Probability of job loss. The mean expectation of job loss over the next 12 months went up by 0.4 percentage point to 14.4% — higher than the trailing 12-month average of 13.9%.
Probability of quitting. The mean expectation of quitting a job over the next 12 months went up by 0.2 percentage point to 19%.
Probability of finding a job if job loss occurs. The mean perceived probability of finding a job over the next 12 months increased by 1.1 percentage points to 50.7%.
Household income growth. The median expectation of household income growth held steady at 2.9%.
Household spending growth. Households expect to spend 4.9% more over the next year, a 0.1 percentage point increase.
Credit access. Fewer households reported that it is easier to get credit now compared to a year ago. But more Americans said they expect getting credit will be easier in the next year.
When do the next consumer sentiment reports come out?
The University of Michigan’s next set of results for its Surveys of Consumers will be released on Friday, Aug. 15.
The Conference Board will release its next Consumer Confidence Survey on Tuesday, Aug. 26.
The New York Fed will release its next Survey of Consumer Expectations on Sept. 8.