U.S. Consumer Sentiment Rises in June but Remains Well Below Pre-Iran Conflict Levels

The U.S. Consumer Sentiment Index improved in June 2026, rising to 49.5 from 44.8 in May, according to the University of Michigan Surveys of Consumers released on Friday. The gain was driven primarily by moderating gasoline prices, which provided some relief to American consumers struggling with persistent inflation. However, the index remains significantly depressed compared to earlier periods: it sits 13 percent below February 2026 levels, before the Iran conflict escalated, and nearly 20 percent below June 2025.

The monthly breakdown shows the Current Index rose to 47.7, up from 45.8 in May, while the Expectations Index climbed to 50.7, up from 44.1 in May. Both subindices, however, remain well below their year-earlier readings of 64.8 and 58.1 respectively. The survey's findings underscore persistent consumer anxiety about the cost of living, which continues to be the dominant concern among Americans. For the third consecutive month, over half of survey respondents spontaneously cited high prices as a significant burden on their personal finances.

Inflation concerns have intensified among consumers. When asked to assess the greatest financial risks in the year ahead, 36 percent identified inflation as a greater threat than unemployment, the highest proportion recorded since February 2025. Only 7 percent cited unemployment as the primary concern. This represents a marked shift from the start of 2026, when 23 percent cited inflation and 14 percent identified unemployment. University of Michigan economist Joanne Hsu noted that while consumers appreciated the recent decline in gas prices, broader price pressures continue to erode confidence in purchasing power and financial stability.