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 July 18.
University of Michigan: Consumers feeling better
The University of Michigan’s Index of Consumer Sentiment increased in July for the second time after five months straight of declines — according to initial results for the month released on Friday.
The consumer sentiment index is up 1.8% from last month, but still down 6.9% compared with one year ago.
Month-over-month gains were also seen for Current Economic Conditions (up 3.1%) and the Index of Consumer Expectations (+0.9%). While economic conditions have improved in consumers’ eyes over the last year — up 6.5% — consumer expectations have also dropped 14.8%.
Joanne Hsu, who directs consumer surveys at the University of Michigan, said in the survey release, “Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen, for example if trade policy stabilizes for the foreseeable future.” She added that there’s little evidence that other new policies, including the recent approval of the “big, beautiful” budget, have impacted consumer sentiment.
New York Fed: Consumers cautiously optimistic
The New York Fed’s Survey of Consumer Expectations for June, released July 8, showed that consumers are more optimistic about price increases, their job security and their own personal finances:
Inflation: Consumers still expect prices for gas, rent, medical care and college to rise. Medical cost expectations hit their highest level since June 2023. Food price expectations held steady. Overall inflation expectations softened, compared with the previous report.
Job security: Workers’ expectations of job loss went down to its lowest level since December 2024.
Personal finances: Households say their financial situation is better off now than a year ago and they expect that trend to continue.
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 with domestic travel.
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 initial reading for July from the University of Michigan released on July 18 shows:
The Index of Consumer Sentiment registered at 61.8 for July, up from 60.7 for June.
Current Economic Conditions registered at 66.8 for July, up from 64.8 for June.
The Index of Consumer Expectations registered at 58.6 for July, up from 58.1 for June.
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 with May (98).
The Present Situation Index registered at 129.1, compared with 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 June from the Federal Reserve Bank of New York’s Survey of Consumer Expectations released on July 8 shows:
Inflation. Median inflation expectations declined in the one-year horizon (down 0.2 percentage point to 3%) and held steady at the three-year (3%) and five-year (2.6%) horizon.
Commodity prices. Year-ahead price expectations increased in multiple categories including gas (up 1.5 percentage points to 4.2%); medical care (up 1.9 percentage points to 9.3%); the cost of college (up 1.6 percentage points to 9.1%); and rent (up 0.7 percentage point to 9.1%). Food price expectations held steady at 5.5%.
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 down by 0.2 percentage point to 2.5%.
Unemployment expectations. The mean probability that the unemployment rate will increase a year from now decreased by 1.1 percentage points to 39.7%.
Probability of job loss. The mean expectation of job loss over the next 12 months decreased by 0.8 percentage points to 14% — its lowest level since December 2024.
Probability of quitting. The mean expectation of quitting a job over the next 12 months went up by 0.8 percentage point to 18.8% — the lowest level since December 2024.
Probability of finding a job. The mean expectation of finding a job over the next 12 months decreased by 1.1 percentage points to 49.6%.
Household income growth. The median expectation of household income growth went up by 0.2 percentage point to 2.9 %.
Household spending growth. Households expect to spend 4.8% more over the next year, a 0.2 percentage point decline.
Credit access. Households reported it is slightly easier to get credit now compared with a year ago, and fewer respondents say they expect getting credit will be difficult 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 Aug. 1. The Conference Board will release its next Consumer Confidence Survey on July 29. The New York Fed will release its next Survey of Consumer Expectations on Aug. 7.