Consumer Sentiment Rises as Gasoline Prices Moderate, Inflation Outlook Drops

01:16 PM EDT, 06/26/2026 (MT Newswires) -- US consumer sentiment increased in June amid moderating gasoline prices, while inflation expectations eased, a survey by the University of Michigan showed Friday.

The main sentiment index jumped nearly 11% sequentially to 49.5 this month. The consensus was for a final reading of 50 in a Bloomberg-compiled poll, compared with the preliminary survey print of 48.9.

The improvement in sentiment came as gas prices moderated, according to Surveys of Consumers Director Joanne Hsu. "The cost of living remains at the forefront of consumers' minds," Hsu said. "For the third straight month, over half of consumers spontaneously mentioned that high prices are weighing down their personal finances."

US retail gasoline prices averaged $3.901 per gallon Friday, compared with $3.973 a week ago and $4.491 a month ago, according to data from AAA, a travel organization that tracks fuel prices in the country.

The year-ahead inflation outlook decreased to 4.6% this month from 4.8% in May, while the five-year price growth expectations declined to 3.3% from 3.9%, the survey showed.

Last week, the US and Iran signed a memorandum of understanding to end their war and reopen the Strait of Hormuz, the world's most important chokepoint for crude flows.

Iran shot "at least four one-way attack drones at ships transversing" the strait, US President Donald Trump said Friday. "This is a foolish violation of our ceasefire agreement," Trump said in a social media post.

The gauge for current economic conditions rose to 47.7 in June from 45.8 last month, while the expectations measure surged 15% to 50.7, according to the University of Michigan survey.

"Expected business conditions over the next five years surged 16% as consumers' worries over long-term consequences of the Iran conflict appear to be easing," Hsu said. "Still, sentiment remains in unfavorable territory at 13% below the February 2026 reading prior to the start of the Iran conflict, and nearly 20% less than a year ago."

On Thursday, official data showed US consumer spending rose more than projected in May, while the Federal Reserve's preferred inflation metric accelerated to the fastest reading in more than two years.

MT Newswires does not provide investment advice. Unauthorized reproduction is strictly prohibited.