University of Michigan Surveys of Consumers July 2026: Optimism and the Economy

Keeping an eye on inflation is important, but so is consumer sentiment. The latest consumer sentiment reading increased in the short term, which is encouraging and represents movement in the right direction. While sentiment remains about 12% lower than it was a year ago, any positive momentum is welcome. Several other economic indicators have also shown modest improvement, suggesting that confidence may be gradually recovering.

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You can review the latest survey results below. In general, higher consumer sentiment reflects greater optimism about personal finances and the economy. From a theoretical perspective, increased optimism often encourages consumers to spend, invest, and participate more actively in the economy, leading to additional economic transactions and growth (Keep that concept in mind.). Conversely, a significant decline in consumer sentiment typically signals lower confidence, reduced spending, and less economic engagement, which can contribute to slower economic activity. For these reasons, consumer sentiment remains an important indicator of the economy's overall health.

University of Michigan Surveys of Consumers – July 2026 Consumer Sentiment Update

• Consumer sentiment increased from 49.5 in June to 54.4 in the preliminary July reading, a gain of 4.9 points (9.9%) and the highest level since February 2026.
• The improvement was driven largely by lower gasoline prices, which boosted confidence across income levels and political affiliations, although sentiment remained approximately 12% below its level one year earlier.
• One-year inflation expectations declined from 4.6% in June to 4.2% in July, while five-year inflation expectations remained unchanged at 3.3%, suggesting consumers expect inflation pressures to moderate somewhat.
• Despite the month-to-month improvement, survey officials cautioned that renewed geopolitical tensions and rising energy prices could weaken consumer confidence in future surveys.
• Month-to-month comparison:
  • June 2026 Consumer Sentiment: 49.5
  • July 2026 (Preliminary) Consumer Sentiment: 54.4
  • Change: +4.9 points (+9.9%)

University of Michigan, Institute for Social Research. (2026, July 17). Surveys of Consumers: Preliminary July 2026 results. https://www.sca.isr.umich.edu/