Consumer Confidence Rebounds for the First Time in 2025

Consumer sentiment in the United States improved notably in June, bouncing back from three-year lows observed in April and May, when Americans were in shock over the Trump administration's tariff announcements. Preliminary results for June from the University of Michigan’s monthly Index of Consumer Sentiment showed a 16-percent jump in the headline Index of Consumer Sentiment, as the initial tariff shock wore off and markets recovered most of the losses incurred in the immediate aftermath of "Liberation Day".

The overall index, which is based on at least 600 telephone interviews per month and focuses on personal finances, business conditions and buying conditions, climbed to 60.5, marking the first month-over-month improvement this year. However, it remains roughly 20 percent lower than in December 2024, when consumer sentiment had seen a typical post-election bump and 11 percent below last year's June level. The uptick was largely driven by a 22-percent jump in the Index for Consumer Expectations, which is based on two questions about personal finances and business conditions over the next 12 months and one question looking at the country's overall economy over the next five years.

“Consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April and the policy volatility seen in the weeks that followed," Survey of Consumer Director Joanne Hsu wrote. "However, consumers still perceive wide-ranging downside risks to the economy. Their views of business conditions, personal finances, buying conditions for big ticket items, labor markets, and stock markets all remain well below six months ago in December 2024."