U.S. consumers appear unshaken by rising geopolitical tensions. Despite the conflict in the Middle East and lingering policy uncertainty, Americans entered June with a slightly stronger economic outlook, brushing aside inflation concerns.
The University of Michigan’s Consumer Sentiment Index rose to 60.7 in June—slightly higher than the preliminary reading and up 8.5 points from the previous month.
It marked the first improvement in six months, even as other consumer surveys showed a slight dip.
Tariff concerns remain, but respondents expressed greater optimism about their personal finances and the near-term business environment.
The survey, which concluded on a Monday, indicated that recent U.S. airstrikes on Iran had little to no effect on how consumers viewed the economy.
Jim Baird, chief investment officer at Plante Moran Financial Advisors, said that consumers aren’t ignoring the risks.
Instead, they’re adapting to a world defined by uncertainty, where shifting events can quickly reshape expectations.
Sentiment still trails December 2024 levels by about 18%, when optimism surged post-election.
Yet some pressure has lifted. Inflation expectations dropped, with respondents forecasting a 5% rise in prices over the next year—down from 6.6% in May.
Survey Director Joanne Hsu noted that consumers are experiencing some relief: the steep tariffs introduced earlier this year haven’t persisted, and the most dire economic outcomes haven’t materialized.
Despite the noise, Americans are adjusting. The story isn’t one of denial, but resilience.
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