Consumer confidence rebounds sharply in June as inflation fears ease, UMich survey shows

By lauraharris // 2025-06-19

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The University of Michigan's early June survey showed a strong recovery in consumer confidence, with the sentiment index jumping 15.9 percent to 60.5, well above expectations.
Americans appear to be adjusting to the high tariffs announced in April, with optimism returning despite ongoing concerns about broader economic risks.
Short-term inflation expectations dropped significantly, with the one-year outlook falling to 5.1 percent, the lowest since early 2023, signaling reduced concern over tariff-driven price hikes.
The data support President Donald Trump's claim that foreign exporters, not American consumers, are bearing most of the tariff costs through price adjustments and margin cuts.
While sentiment remains below year-ago levels and risks persist, the report suggests early signs that Trump's trade policies may be stabilizing consumer outlooks and inflation expectations.

A new University of Michigan survey has revealed that American consumers are beginning to shake off some of their recent economic anxiety, as signs of progress in global trade disputes and easing inflation fears helped lift sentiment sharply in early June. According to the university's latest Surveys of Consumers, released on June 13, there is a surprising rebound in sentiment following weeks of uncertainty surrounding tariffs and geopolitical tensions. The headline consumer sentiment index climbed to 60.5 – well above economists' expectations of 54 and marking a robust 15.9 percent increase from May's reading. "Consumers appear to have settled somewhat from the shock of the extremely high tariffs announced in April and the policy volatility seen in the weeks that followed," Joanne Hsu, survey director, said. "However, consumers still perceive wide-ranging downside risks to the economy." The details of the report reflected across-the-board improvements. The current conditions index rose by 8.1 percent, indicating consumers feel more confident about their present financial situations. More notably, the expectations index, seen as a predictor of future economic activity, soared by 21.9 percent, pointing to a rebound in consumer optimism. Despite the gains, sentiment levels remain well below those recorded a year ago, highlighting ongoing public concerns over the long-term impacts of elevated tariffs and other global uncertainties. Still, one of the most encouraging signs in the report was a steep drop in near-term inflation expectations. The one-year inflation outlook fell to 5.1 percent, down 1.5 percentage points and the lowest level since early 2023. The five-year outlook saw a marginal decrease to 4.1 percent. "Consumers' fears about the potential impact of tariffs on future inflation have softened somewhat in June," Hsu noted. "Still, inflation expectations remain above readings seen throughout the second half of 2024, reflecting widespread beliefs that trade policy may still contribute to an increase in inflation in the year ahead." Economists will be watching closely to see if these early signs of optimism can be sustained, especially as negotiations continue to unfold in the global trade arena. The final June reading from the Michigan survey is due later this month. (Related: Market rebounds on Trump's tariff pause, but uncertainty looms.)

Trump is right: Tariffs aren't hitting U.S. consumers as predicted

The rebound follows months of public concern that the reciprocal tariffs of President Donald Trump, introduced in April, could reignite inflation. Economists, policymakers and financial leaders have warned that these aggressive tariff policies could trigger sharp price increases for American consumers. However, the latest data are beginning to challenge that narrative as price data stabilizes and the implications of recent trade strategies become clearer. This supports Trump's long-held assertion that foreign exporters, heavily dependent on U.S. consumers, would bear the brunt of tariffs rather than risk losing market share. The data reinforces that view: tariffs haven't automatically led to higher prices on store shelves. Instead, global suppliers have often reduced their pre-tariff prices to remain competitive, softening the impact on American consumers while absorbing the costs themselves. In short, Trump's gamble appears to be working. Rather than burdening U.S. households, the tariffs are forcing foreign exporters to shoulder the cost – either through slimmer profit margins or strategic pricing adjustments. Follow Trump.news for more news about his second administration. Watch the video below about Trump vowing to bring prices way down during his 2024 presidential campaign.

This video is from the NewsClips channel on Brighteon.com.

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Trump is right: Tariffs aren't hitting U.S. consumers as predicted

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