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US consumer sentiment rises in July as gasoline costs ease

The University of Michigan’s inflation outlook also cooled, with one-year expectations falling to 4.2% from 4.6% in July.

Reported · Written up by our desk · Economy

US consumer sentiment improved in July, according to the University of Michigan preliminary survey, with its overall index rising to 54.4 from 49.5, the highest level since February. Action Forex reports the increase was driven largely by easing gasoline prices, lifting all five components of the survey.

The report shows gains across durable goods buying conditions and expectations for business conditions over the coming year, with both components surging by about 20%. Sentiment also improved across age, income, wealth, and political affiliations, though overall confidence remained well below year-ago levels.

The survey also pointed to inflation dynamics that may affect whether the optimism holds. Action Forex notes consumers’ one-year inflation outlook moderated to 4.2% from 4.6% while longer-term inflation expectations were unchanged at 3.3%.

Timing may also influence how fully the reading captures later developments, as more than 70% of interviews were completed before US strikes against Iran resumed on July 7 and after a subsequent rebound in gasoline prices. Action Forex said the latest reading may not fully reflect the effect of renewed geopolitical tensions if higher energy costs feed back into broader inflation concerns.

Latest closeGasoline (RBOB) $3.114 ▼5.7%

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