Consumers are starting to feel better about the US economy as President Trump dials back his most aggressive stances on tariffs.
The latest University of Michigan survey released Friday showed sentiment increased for the first time in six months. The index increased to a reading of 60.5, above the 52.2 seen last month and the 53.6 expected by economists. The increase came after May brought one of the lowest readings on record.
Pessimism over the inflation outlook lessened in June as one-year inflation expectations plunged from a more than four-decade high to 5.1%. In May, one-year inflation expectations hit 6.6%.
Long-run inflation expectations, which track expectations over the next five to 10 years, also fell, hitting 4.1% in June, down from 4.2% in May.
“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 Consumers director Joanne Hsu wrote in the release.
Hsu added, “Despite this month’s notable improvement, consumers remain guarded and concerned about the trajectory of the economy.”