Consumer Sentiment Up 16% in May, Down 11% YOY

Ann Arbor, MI, June 27, 2025-Consumer sentiment surged 16% from May in its first increase in six months but remains well below the post-election bounce seen in December 2024, according to final results from the University of Michigan Survey of Consumers. This represents an 11% decline year over year.

“The improvement was broadbased across numerous facets of the economy, with expectations for personal finances and business conditions climbing about 20% or more,” says Survey of Consumers director Joanne Hsu. “Despite June’s gains, however, sentiment remains about 18% below December 2024, right after the election; consumer views are still broadly consistent with an economic slowdown and an increase in inflation to come. Consumers continue to be concerned about the potential impact of tariffs, but at this time, they do not appear to be connecting developments in the Middle East with the economy. 

Year-ahead inflation expectations plummeted from 6.6% last month to 5.0% this month, the report says. Long-run inflation expectations receded for the second straight month, falling back from 4.2% in May to 4.0% in June. Both readings are the lowest in three to four months. 

“Consumers’ fears about the potential impact of tariffs on future inflation softened somewhat in June, Hsu adds. “Still, inflation expectations remain above readings seen throughout the second half of 2024, reflecting widespread beliefs that risks to inflation have not fully abated.

The new report was released on the same day the Department of Commerce reported that consumer spending was down in May.