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The sentiment of consumers rose for the initial time in six months, increasing by 16% from the prior month but still hovering about 18% below the levels seen in December 2024, when consumer sentiment had demonstrated a post-election boost.

These patterns were clearly evident across various demographics including age, income, wealth, political affiliation, and geographic locality. Improvements observed in June spanned several facets of the economy, reflecting a perceived alleviation of pressures from tariffs, stated economist Joanne Hsu, who oversees the University of Michigan’s Survey of Consumers.

Nonetheless, consumers are far from optimistic about the economic landscape; perspectives have not rebounded from the sharp downturn experienced this year. While they are no longer preparing for the most pessimistic scenarios for the economy, consumers continue to anticipate an impending downturn.

“Consumers sense they have some leeway, as the historically elevated tariffs declared earlier this year have not been maintained, and the worst-case scenarios for the economy have not materialized,” Hsu explained. “However, consumers remain concerned that higher inflation and an economic downturn are imminent, and they continue to act with caution. At this moment, they are not linking developments in the Middle East to the economy.”

Labor Market Outlook Shows Improvement but Remains Pessimistic

Expectations regarding the labor market saw an uptick this month, yet they still remain significantly lower than at the year’s start. Approximately 57% of consumers foresee an increase in unemployment in the upcoming year, down from 66% in March but still much greater than the 40% observed in December 2024.

Expectations for personal income growth improved slightly this month, although June’s figures are less favorable than those of six months ago. Anticipations for personal financial situations surged 17% from near historic lows in May, yet are still 17% lower than December 2024, according to Hsu.

Thus, while consumers feel somewhat more assured about their incomes this month compared to May, they have not regained the level of confidence concerning their finances that would encourage substantial spending.

Tariffs Persist in Influencing Consumer Perceptions of the Economy

Perceptions regarding the anticipated impact of tariffs have influenced consumer views this year, and this month’s data reflect no exception. In June, around 59% of consumers provided unsolicited remarks regarding tariffs, down from 66% the previous month but continuing a trend of three consecutive months where a majority of consumers did so.

According to Hsu, there was a slight decline in the portion of consumers who spontaneously mentioned tariffs as a detrimental factor for purchasing durable goods or automobiles, both of which showed improvement this month yet remain below levels from last December.

The proportion of consumers forecasting deteriorating business conditions in the coming year decreased from 64% in May but currently stands at a still elevated 55%, compared to only 29% in November 2024.

Consumer Sentiment Index

The Consumer Sentiment Index advanced to 60.7 in the June 2025 survey, rising from 52.2 in May but remaining beneath last June’s 68.2. The Current Index climbed to 64.8, up from 58.9 in May while still falling short of last June’s 65.9. The Expectations Index improved to 58.1, climbing from 47.9 in May but below last June’s 69.6.

About the Surveys

The Surveys of Consumers is a rotating panel survey conducted at the University of Michigan Institute for Social Research. It is based on a nationally representative sample that ensures each household within the contiguous U.S. has an equal chance of selection. Interviews take place throughout the month via the web. The minimum monthly change necessary for significance at the 95% level in the Sentiment Index is 4.8 points; for the Current Index and Expectations Index, the minimum requirement is 6 points.

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