(NEW YORK) — Consumer sentiment improved in June for the first time since the outbreak of the Iran war as gasoline prices eased in recent weeks, but shopper attitudes remained near their worst level on record, University of Michigan survey data on Friday showed. The reading exceeded economists’ expectations.
The survey snapped three consecutive months of dampening consumer sentiment, recovering from an all-time low in May, data showed. The University of Michigan has conducted the survey for the past 80 years.
This improvement in sentiment was widespread, seen across age, education and political party, Surveys of Consumers Director Joanne Hsu said in a statement. Overall assessments and expectations of personal finances and business conditions all rose in June, she noted.
The fresh figure comes days after a government report on inflation showed the pace of price increases exceeded 4% for the first time in three years.
Prices rose 4.2% in May compared to a year earlier, increasing 0.5% from the prior month, according to U.S. Bureau of Labor Statistics data.
Consumers expect inflation to move higher over the next year, hitting a pace of 4.8% in June 2027, the University of Michigan survey showed.
The Middle East conflict prompted the Iranian closure of the Strait of Hormuz, a maritime trading route that facilitates the transport of about one-fifth of global oil supply. The standoff triggered one of the largest oil shocks ever recorded, sending gasoline prices higher.
Drivers stung by high gas prices have enjoyed some welcome relief over recent weeks, however, even as the impact of the Iran war continues to choke off oil supply.
The national average price of a gallon of gas stands at $4.10, marking a decline of 40 cents, or 8.8%, over the past month, AAA data showed. Gas prices, however, remain $1.12 higher than where they stood before the Iran war.
Consumer spending, which accounts for about two-thirds of U.S. economic activity, could weaken if shopper remains lackluster.
Spending slowed over the first three months of 2026 compared to the previous three-month period, according to government data issued earlier this year. The economy remained solid at the outset of this year, however, as gross domestic product rose 2% on an annualized basis, the report showed.
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