Cheaper gas means better moods for Americans
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Americans felt better about the economy in June as gas pump prices eased.
Why it matters: Few economic indicators shape Americans' outlook more than the cost of filling up their tanks.
- June's rebound suggests easing fuel costs and fading fears about the Middle East conflict were enough to lift confidence, even as inflation and the cost of living continue to weigh on households.
What's new: The University of Michigan consumer sentiment index rose nearly 5 points in June, with expectations improving far more than views of current conditions — a sign that Americans are feeling less anxious about what's ahead.
- The survey period captures the second half of June, which included the U.S. and Iran signing a memorandum of understanding to end the war.
- The average gas price nationwide dropped below $4 a gallon this month for the first time since March.
Yes, but: Even after June's improvement, consumer sentiment remains about 7 points below its pre-Iran conflict level — and roughly 11 points below its level a year earlier.
What they're saying: "The cost of living remains at the forefront of consumers' minds," University of Michigan survey director Joanne Hsu said in a statement.
- "[F]or the third straight month, over half of consumers spontaneously mentioned that high prices are weighing down their personal finances."
- Consumers expect prices to rise 4.6% over the next year, down slightly from May but still well above the 3.4% pre-Iran conflict levels and all of those seen in 2024.
