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The Consumer Sentiment Index released Friday by the U.S. University of Michigan Surveys of Consumers rose to 61.7 in the July 2025 survey, up from 60.7 in June but below last July's 66.4.
The consumer sentiment improved for the second time in six months, inching up less than 2 percent from June but staying about 17 percent below December 2024, when sentiment had exhibited a post-election bump.
The Current Economic Conditions Index rose to 68, up from 64.8 in June and above last July's 62.7. The Consumer Expectations Index fell to 57.7, down from 58.1 in June and below last July's 68.8.
A solid majority of about 57 percent of consumers spontaneously offered comments about tariffs, down for two straight months from a high of two-thirds in May.
Tariff concerns are strong among higher-income and college-educated consumers, as well as consumers with large stock holdings. These consumers note that their finances have been boosted by strong stock markets, but their personal views of the economy are still relatively gloomy.
Labor market expectations improved a bit but remain weaker than a year ago. About 57 percent of consumers expect unemployment to rise next year, down from the two-thirds seen in April when massive tariffs were announced, but well above the 35 percent from last year.
The improvement in July was particularly strong among consumers who hold stocks, consistent with continued strength in equity markets, whereas consumers without stock holdings posted a decline in sentiment, said economist Joanne Hsu, director of the surveys.
"While consumers may welcome any sign that trade policy is firming, recent announcements have included tariffs that are far higher than seen in recent memory," she said. "At this time, consumers are unconvinced that the prospect of higher inflation or a deterioration in business conditions has passed, even if they are no longer bracing for a catastrophic worst-case scenario."
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