ANN ARBOR, Mich. — Consumer sentiment is holding steady in July, according to preliminary findings from the University of Michigan Surveys of Consumers.

Sentiment nudged up one index point to its highest level in five months but is still 16% below December 2024 levels.

What You Need To Know

  • Consumer sentiment is holding steady in July, according to preliminary findings from the University of Michigan Surveys of Consumers

  • Sentiment nudged up one index point to its highest level in five months but is still 16% below December 2024 levels

  • At 61.8, the consumer sentiment reading remains well below the historical average of 84.4, the surveys noted Friday

  • “Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen,” Surveys of Consumers Director Joanne Hsu said in a statement

At 61.8, the consumer sentiment reading remains well below the historical average of 84.4, the surveys noted Friday.

“Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen, for example if trade policy stabilizes for the foreseeable future,” Surveys of Consumers Director Joanne Hsu said in a statement.

Earlier this month, President Donald Trump announced new tariffs on several U.S. trading partners, including a 25% tax on imports from Japan and Korea; a 30% import tax on goods from Mexico and the European Union; and a 50% tariff on copper. The tariffs are set to take effect Aug. 1.

“At this time, interviews reveal little evidence that other policy developments, including the recent passage of the tax and spending bill, moved the needle much on consumer sentiment," Hsu said.

On July 4, Trump signed a sweeping policy bill that extends and expands the tax cuts he enacted during his first term and increases spending on the military and immigration enforcement. The nonpartisan Congressional Budget Office estimates the new law will increase the federal deficit by more than $3 trillion over the coming decade.

Hsu said consumers’ expectations for inflation a year from now fell for a second consecutive month, down 4.4% in July compared with a month earlier. Long-run expectations about inflation also fell for a third consecutive month, dropping 3.6% in July.

While consumers are feeling worse about their personal finances in July— sentiment fell 4% compared with a month earlier — they feel more positively about short-run business conditions, with sentiment improving 8%.

“Both readings are the lowest since February 2025 but remain above December 2024, indicating that consumers still perceive substantial risk that inflation will increase in the future,” Hsu said.

This week, the U.S. Bureau of Labor Statistics reported year-over-year inflation increased to 2.7% in June — up from 2.4% in May.