Consumer sentiment finished July at 55.2, the highest since February, and the survey says households are looking at prices rather than at the war
The index rose to 55.2.
That is the University of Michigan's final reading of consumer sentiment for July, against 49.5 in June and 61.7 in July 2025. The monthly gain is 11.5 percent. The annual fall is 10.5 percent, and both numbers are true at once, which is the useful thing about this series in 2026.
Set against the surrounding months, 55.2 is the highest since February. February was 56.6, so the recovery has not reached where the year began.
The components moved together
Current economic conditions rose to 54.8 from 47.7, a gain of 14.9 percent and a fall of 19.4 percent against a year ago. Expectations rose to 55.4 from 50.7, up 9.3 percent on the month and down 4.0 percent on the year.
Joanne Hsu, who directs the surveys, reports that the improvement was broad-based across every group the survey cuts by, meaning income, education, wealth, age and political party. Five-year expected business conditions reached a 12-month high, though the release adds that the measure remains well under its historical average.
What households said they were looking at
The line worth extracting from the commentary is not a number.
Consumers remain focused on pocketbook issues like purchasing power, Hsu writes, while political or military developments remain more in the background. Interviews for this release ran from 23 June to 27 July, which covers the period after US strikes on Iran resumed on 7 July.
When this publication reported the preliminary July reading on 17 July, the caveat attached was precisely that timing: more than 70 percent of those interviews had been completed before 7 July, so the preliminary figure was largely a pre-escalation measure. The final reading covers the weeks after, and the survey's own account of it puts the war behind the price of things.
The preliminary figure was 54.4, as this publication reported at the time. The page published on Friday carries final results only and does not restate it, and Hsu's commentary says the final reading confirmed the early-month one.
Inflation expectations, which is what gets read downtown
Year-ahead inflation expectations came down to 4.2 percent from 4.6 percent in June.
The release does not leave that alone. It states that 4.2 percent substantially exceeds the 3.4 percent recorded in February, before the Iran conflict began, and exceeds every reading taken during 2024.
Long-run expectations did not move. They held at 3.3 percent, which the survey notes is a bit higher than the 2.8 to 3.2 percent range that prevailed through 2024.
Earlier the same morning the Bureau of Labor Statistics reported that inflation-adjusted wages and salaries for private industry workers fell 0.4 percent over the year to June. The two releases are unrelated instruments and neither explains the other. They arrived within 90 minutes of each other, and both are about what a dollar of pay buys.
Preliminary August figures are due on 14 August.
