The numbers: Consumer sentiment rose in June to a four-month high of 63.9 as inflation eased and Washington ended the latest debt-ceiling fight, but Americans still expect difficult times ahead.
The index, produced by the University of Michigan, rose from 59.2 in May.
The consumer-sentiment survey reveals how consumers feel about their own finances as well as the broader economy.
Sentiment is far below a recent peak of 88.3 in 2021 and a prepandemic high of 101. The index dropped to an all-time low of 50 last summer.
Key details: A gauge that measures what consumers think about the current state of the economy increased to 68.0 from 64.9 in May.
A measure that asks about expectations for the next six months moved up to 61.3 from 55.4 in May.
Both indexes are still quite low, however.
Inflation expectations came down. Americans think inflation will average 3.3% in the next year, down from 4.2% in the May survey. They also believe inflation will average about 3% annually in the next five years, well above prepandemic levels.
Big picture: Americans say they don’t feel confident in the economy, but the unemployment rate sits near a 50-year low, the stock market is rising again and inflation is slowly coming down. A widely predicted recession also still appears far off.
Looking ahead: The rise in sentiment in June reflects “greater optimism as inflation eased and policymakers resolved the debt ceiling crisis,” said Joanne Hsu, director of the survey. However, she noted that “a majority of consumers still expect difficult times in the economy over the next year.”
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
rose in Friday trades.
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