Consumer sentiment rises for the first time in three months

Consumer Confidence Rebounds After Three-Month Dip

Consumer sentiment rises for the first - The University of Michigan’s latest survey, released on Friday, indicates a notable uptick in U.S. consumer sentiment, marking the first positive shift since February. This month’s preliminary reading of 48.9 reflects a 9% increase, offering a glimmer of hope amid ongoing economic uncertainty. The rise follows a period of steep declines, largely driven by the escalation of conflicts between the U.S., Israel, and Iran, which triggered sharp spikes in global energy prices.

Gas prices, a critical factor in shaping public economic perception, had been a major drag on sentiment. After surging in the weeks following the war’s outbreak, they began to ease, allowing consumer confidence to recover. Joanne Hsu, the survey’s director, highlighted this trend in a statement:

“This month, consumer sentiment ticked up… with consumers experiencing some relief due to the early-month easing in gasoline prices.”

She noted that lower-income households showed a particularly strong rebound, as energy costs consume a larger portion of their budgets.

Historical Context and Persistent Challenges

While the current reading surpasses levels seen during previous crises—such as the Great Recession, the pandemic, and the post-9/11 era—consumer sentiment remains fragile. Analysts caution that sustained improvement will depend on further declines in energy prices, which may require unimpeded oil flow through the Strait of Hormuz, a vital shipping route for one-fifth of global oil supplies.

Consumer confidence has been in a prolonged slump, influenced by a series of economic shocks over the past few years. Since 2020, Americans have weathered the pandemic recession, followed by a surge in inflation that reached a four-decade high in 2022. Additional pressures came from Federal Reserve rate hikes in 2023 and congressional gridlock over the debt ceiling. Despite a tentative recovery in 2024, this progress was reversed in 2025 by Trump’s proposed tariffs, which reignited fears of rising costs.

Resilience Amid Uncertainty

A separate quarterly survey by TransUnion revealed that consumer optimism has remained relatively stable since Trump’s “Liberation Day” tariffs were announced last April. Charlie Wise, head of global research and consulting at TransUnion, noted a slight decrease in pessimism, stating in an interview:

“We see a lot of resilience in consumers that maybe have gotten a little bit more accustomed to the volatile times that we live in, and a lot of price uncertainty.”

Despite the recent improvement, inflation remains the leading financial concern for consumers. The latest Consumer Pulse Survey from the credit bureau shows 50% of respondents cite inflation as their primary worry, up from 47% in the prior quarter. Kevin Warsh, an economic expert, suggests that while consumers may feel the effects of inflation, they are increasingly adapting to its presence.

“A cynic might say they’re getting numb to it, but I think more realistically they’re getting used to the realities that price stability is going to be a little out of normal balance for a continuing amount of time,”

he remarked.