U.S. Consumer Sentiment Improves More Than Previously Estimated In July

(RTTNews) - A report released by the University of Michigan on Friday showed consumer sentiment in the U.S. improved more than previously estimated in the month of July.

The University of Michigan said its consumer sentiment index for July was upwardly revised to 55.2 from a preliminary reading of 54.4. Economists had expected the index to be downwardly revised to 54.2.

With the unexpected upward revision, the index is well above the June reading of 49.5 and the record low of 44.8 hit in May.

"Despite recent gains, sentiment is 11% below a year ago, reflecting a generally somber view of the economy amid five years of elevated inflation and persistent high prices," said Surveys of Consumers Director Joanne Hsu.

She added, "Consumers remain focused on pocketbook issues like purchasing power, while political or military developments remain more in the background."

The report also said the current economic conditions index surged to 54.8 in July from 47.7 in June, while the index of consumer expectations jumped to 55.4 in July from 50.7 in June.

With regard to inflation expectations, the University of Michigan said year-ahead inflation expectations fell to 4.2 percent in July from 4.6 percent in June.

Hsu noted the current reading substantially exceeds the 3.4 percent seen in February before the Iran conflict began, along with all 2024 readings.

The report also said long-run inflation expectations held steady from last month at 3.3 percent, remaining a bit higher than the 2.8 to 3.2 percent range seen in 2024.