The University of Michigan’s Consumer Sentiment Index climbed to 54.4 in July 2026, exceeding the consensus forecast of 51.0 and posting a second consecutive monthly gain following May’s record low, according to the preliminary reading. Sentiment rose to its highest level since February, supported in part by easing gasoline prices.
All five components of the index strengthened, led by roughly 20% improvements in assessments of buying conditions for durable goods and expectations for business conditions over the coming year. The rebound was broad-based across age, income, wealth, and political groups, with especially pronounced gains among consumers without a bachelor’s degree.
Even so, overall sentiment remains 12% below its level of a year earlier, as elevated prices continue to pressure household finances. One-year inflation expectations edged down to 4.2% from 4.6%, while long-run expectations were unchanged at 3.3%. The majority of survey responses were collected before the resumption of U.S. strikes against Iran on July 7 and the subsequent increase in gasoline prices.
