Consumer Sentiment Rebounds in June as Inflation Holds/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. consumer sentiment rose in June for the first time in six months. The rebound follows tame inflation and a temporary truce in Trump’s trade war with China. Sentiment remains historically low, but signs of stabilization are emerging.
Consumer Confidence Rises in June: Quick Looks
- First rise in 2025: Sentiment index jumps 16% to 60.5.
- Tariff relief: Truce with China and tariff pause help boost outlook.
- Inflation tame: Prices remain stable despite elevated trade duties.
- Lingering caution: Americans still see downside risks amid policy uncertainty.
Consumer Sentiment Rebounds in June as Inflation Holds
Deep Look
Confidence Climbs After Months of Decline
For the first time in 2025, U.S. consumers are feeling slightly more optimistic about the economy. The University of Michigan’s preliminary consumer sentiment index for June rose sharply—up 16% to 60.5—after five consecutive months of decline. The recovery, though meaningful, still leaves sentiment 20% below December 2024 levels.
The reversal comes as inflation remains stable and the Trump administration has momentarily dialed back its aggressive trade stance. In particular, President Donald Trump’s recent decision to pause tariffs on roughly 60 countries and reach a temporary trade truce with China has calmed market volatility and reduced uncertainty for consumers.
Survey Shows Softened Fear, Persistent Concerns
According to Joanne Hsu, director of the Michigan survey, “Consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April.” While the gains in sentiment suggest improved short-term confidence, she noted that “consumers still perceive wide-ranging downside risks to the economy.”
The April tariffs—steep levies on a broad range of imports—shook both markets and households. The policy volatility in the weeks that followed caused a sharp dip in consumer outlooks, reaching the second-lowest reading in the survey’s 75-year history last month.
Trade Truce and Inflation Control Offer Relief
The sentiment rebound aligns with a broader sense of relief after weeks of trade escalation. The Trump administration’s moves had sparked fears of price hikes, but so far, inflation has remained under control. Despite high tariff levels, the Consumer Price Index has shown little sign of sharp increases, which is helping to preserve consumers’ purchasing power.
The temporary pause in trade hostilities—particularly with China—has eased immediate fears of economic fallout. This improvement, while modest, suggests that Americans are reacting positively to perceived economic stability, even amid broader uncertainty about the long-term path of U.S. trade and fiscal policy.
Historical Context
Though sentiment has improved, the overall index remains deeply depressed by historical standards. The June level of 60.5, while higher than May’s, is still significantly below the long-term average. It reflects an electorate and consumer base that remains wary of the economy’s resilience under the weight of tariffs, slowing global trade, and upcoming policy battles.
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