Consumer Sentiment in June: Up or Down? Choose Your Index
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 June 27.
University of Michigan: Consumers feeling better
The University of Michigan’s Index of Consumer Sentiment climbed 16% in June — the first increase in six months — according to final results for the month released on Friday.
Despite the gains, however, sentiment is still about 18% below post-election levels seen in December 2024.
Month-over-month gains were also seen for Current Economic Conditions (up 10%) and the Index of Consumer Expectations (up 21.3%), while consumer expectations of year-ahead and long-term inflation continued to fall.
Joanne Hsu, who directs consumer surveys at the University of Michigan, said in the survey release, “The improvement was broad-based across numerous facets of the economy, with expectations for personal finances and business conditions climbing about 20% or more.”
However, she added, “consumer views are still broadly consistent with an economic slowdown and an increase in inflation to come. Consumers continue to be concerned about the potential impact of tariffs, but at this time they do not appear to be connecting developments in the Middle East with the economy.”
Conference Board: Consumers feeling worse
Conversely, the Conference Board’s Consumer Confidence report for June (released June 24) found that consumers are less optimistic about the economy than they were the previous month. In fact, the latest levels erased half of the gains seen in May. Some key takeaways from the report:
Tariffs top consumer concerns. Consumers consistently said tariffs are their main economic concern, according to The Conference Board’s Consumer Confidence report for June. Some other sources of their unease include rising costs and the possibility of a recession.
Confidence is falling among all demographics. The report found that the confidence drop was broad-based, affecting all ages, most income groups and all political affiliations. The top decreases in consumer confidence were among those who identify as Republicans.
Consumers have changed some spending plans. Plans to purchase cars have remained strong, despite tariffs. Home buying plans, on the other hand, have declined. When it comes to other big-ticket purchases, most consumers were undecided. Vacation plans haven’t changed much, although international travel plans rose compared to domestic travel.
New York Fed: Consumers cautiously optimistic
The New York Fed’s Survey of Consumer Expectations for May, released June 9, showed that consumers are more optimistic about price increases, their job security and their own personal finances:
Inflation: While consumers still expect prices for rent, medical care and homes to rise, the growth expectations declined compared to previous reports. However, consumer expectations about food price increases over the next year are at their highest level since October 2023.
Job security: Workers’ expectations of unemployment dropped by 3.3 percentage points to 40.8%, while the mean probability of job loss over the next 12 months went down by 0.5 percentage points to 14.8%. The chance that workers will quit their jobs in the next year increased by 0.1 percentage point to 18.3%, which demonstrates workers are confident about the labor market.
Personal finances: Households say they are likely to access credit more easily than they did a year ago, but still expect access to credit to be more difficult in the next year. They are less likely to miss a minimum debt payment and reported being better off compared to a year prior.
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.
What is consumer sentiment like right now?
The University of Michigan’s Index of Consumer Sentiment
The final reading for June from the University of Michigan released on June 27 shows:
The Index of Consumer Sentiment registered at 60.7 for June, up from 52.2 in May.
Current Economic Conditions registered at 64.8 compared to 58.9 in May.
The Index of Consumer Expectations was at 58.1 compared to 47.9 in May.
The Conference Board’s Consumer Confidence Index
Conference Board data for June, released on June 24, shows:
The Conference Board’s Consumer Confidence Index went down for June (93) compared to May (98).
The Present Situation Index registered at 129.1, compared to 135.9 in May.
The Expectations Index increased to 69 in June from 72.8 in May.
The report notes that preliminary results were collected after President Donald Trump paused some tariffs on Chinese imports. Since the response cutoff on May 19, Trump has also threatened 50% tariffs on the European Union.
The Federal Reserve Bank of New York’s Survey of Consumer Expectations
The highlights for May from the Federal Reserve Bank of New York’s Survey of Consumer Expectations released on June 9 shows:
Inflation. Median inflation expectations declined in the one-year horizon (down 0.4 percentage points to 3.2%), three-year horizon (down 0.2 percentage point to 3%) and five-year horizon (down 0.1 percentage point to 2.6%).
Commodity prices. Year ahead price expectations decreased in multiple categories including gas (down 0.8 percentage point to 2.7%); medical care (down 1.3 percentage points to 7.4%; the cost of college (down 1.6 percentage points to 7.5%); and rent (down 0.6 percentage point to 8.4%). Food price expectations went up 0.4 percentage point to 5.5%..
Home price growth. Median year-ahead home price growth expectations went down by 0.3 percentage point to 3%.
Earnings expectations. Median one-year-ahead expectations for earnings growth went up by 0.2 percentage point to 2.7%.
Unemployment expectations. The mean probability that the unemployment rate will increase a year from now decreased by 3.3 percentage points to 40.8%.
Probability of job loss. The mean expectation of job loss over the next 12 months decreased by 0.5 percentage points to 14.8%.
Probability of quitting. The mean expectation of quitting a job over the next 12 months went up by 0.1 percentage point to 18.3%.
Probability of finding a job. The mean expectation of finding a job over the next 12 months increased by 1.5 percentage points to 50.7%.
Household spending growth. Households expect to spend 5% more over the next year, a 0.2 percentage point decline compared to the previous month’s one-year expectations.
Credit access. Households reported it is slightly easier to get credit now compared to a year ago, but they expect it will still be hard to get credit 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 Tuesday, July 29. The Conference Board will release its next Consumer Confidence Survey on Tuesday, June 24. The New York Fed will release its next Survey of Consumer Expectations on July 8.