US consumer sentiment rises to its highest as inflation expectations decline

In June, the US consumer sentiment index surged 8.3 points to 60.5, the steepest since the beginning of the year, according to the University of Michigan. The rise was driven by eased concerns over the economic situation and short-term inflation expectations falling to their lowest in two decades. 

Consumer expectations for price growth over the next year dropped from 6.6% in May to 5.1% in June, marking the sharpest monthly decline since October 2001. Less anxiety around President Trump’s trade policy allowed consumers to grow more confident about the future, the researchers said.

The poll, conducted between May 27 and June 9, showed improved sentiment among all political groups, including Republicans, Democrats, and political independents. Joanne Hsu, Director of the University of Michigan's monthly Surveys of Consumers, noted that consumers partially adapted to the high tariffs, yet remained cautious because of risks to the economy.

This rise in confidence may alleviate concerns about a slowdown in consumer spending, a key driver of the US economy.