Americans have been the most optimistic about the economy since Trump took office
When it comes to gaining intuition for the health of American consumers, there is one research to control them all. It runs every month Since 1946University of Michigan’s Consumer Sentiment Survey, provides an uninterrupted long-term record of American consumer moods across wars, booms, recessions and technological changes.
Preliminary results from the University of Michigan show that the July edition shows a new optimism as it rose from 60.7 in June to 61.8. This slightly exceeds analyst expectations and marks the index’s highest point in five months. A few months before President Donald Trump re-inaugurated in February Shocked market and Allies His “Release date“April tariffs. Still, it is only the cause of a calm celebration.
A survey by consumer director Joan Hussou characterized the results as “it’s been a little weird” and “it scored almost one index point” since June. She admitted it was five months high, but “it’s 16% below December 2024, well below the historic average.” A closer look at the data shows that Western consumers also generally do not share the prospect of improvement.
High Western American in a bad mood
The current economic situation index rose 3.1 points to 66.8, indicating increased confidence in the short-term business and employment outlook. However, the consumer expectations index reflects expectations for the next six months, but it has run at just 58.6 to just 58.6 since last year, down 14.8%. In particular, respondents’ outlook for their own finances fell by about 4%, continuing individual financial concerns despite wider improvements.. And despite the recent increase, surveyors emphasize that sentiment among Western consumers has declined by 17% since December 2024.
University of Michigan
Short-term business conditions improved by around 8%, but expected personal finances fell by around 4%. Consumers are unlikely to regain confidence in the economy unless they are convinced that inflation is unlikely to worsen, for example if trade policies stabilize in the near future. At this time, the interviews reveal little evidence that other policy developments, including the recent passing of tax and spending bills, have driven the needle heavily in consumer sentiment. However, there have been movements regarding inflation expectations.
Inflation expectations drop sharply
One of the most prominent changes in emotions is related to inflation. Historic inflation expectations for the year fell to 4.4% for the second straight month, down from 5.0% in June to a peak of 6.6% in May, marking the lowest reading since February 2025.
Long-term inflation expectations have also set back, falling to 3.6% (from 4.0% in June) for the third consecutive month. These are the most moderate measurements in months, but both remained higher than those seen in the second half of 2024, highlighting continued vigilance about long-term inflation risks.
HSU noted that inflation remains the best in the mind, with new optimism easing away new optimism, especially in the context of recent trade policy movements. “Consumers are unlikely to regain confidence in the economy unless they are convinced that inflation is unlikely to worsen, for example, if trade policies stabilize in the near future,” HSU explained..
Respondents reported that legislative developments such as recently enacted tax and expenditure bills had little identifiable impact on overall sentiment..
Increased consumer confidence shows that recent economic data is robust Retail sales and A resilient labor marketsuggests a disconnect between consumer perceptions and macroeconomic trends..
For this story, luck Generated AI was used to assist with initial drafts. The editors checked the accuracy of the information prior to publication.