Easing gas prices are making Americans feel better about their personal finances and the economy in June, but consumer sentiment remains at historically low levels amid ongoing conflict in the Middle East, according to new survey data from the University of Michigan.
The latest numbers come as SpaceX marks its historic stock market debut, which will likely make Elon Musk the world’s first trillionaire. Yet many Americans still feel like they’re struggling even as the stock market reaches record-highs.
Sentiment went up four points since mid-May, when Americans were paying an average of $4.50 per gallon at the pump, according to AAA. Average gas prices have since dropped to $4.10 per gallon – $1 more per gallon since a year ago.
Despite the rise in the index, sentiment is still lower than it was during the Covid-19 pandemic, including the high periods of inflation after, and last year, when Donald Trump introduced a slate of new tariffs.
“Views of the economy are still relatively dour,” said Joanne Hsu, director of the surveys of consumers at the University of Michigan. Consumers “feel burdened by the recent escalation in inflation and worry that higher inflation could remain stubborn going forward”, she added.
New US economic data from earlier this week showed that inflation hit a three-year high in May, reaching over 4% for the first time since 2023. Gas prices, however, came down in May, leading to some relief for American consumers, according to Hsu.
The recent uptick in consumer sentiment was widespread, seen across age groups, education levels and political parties. Lower income groups, who are most sensitive to price fluctuations in gasoline, exhibited a particularly strong sentiment increase. Americans’ expectations of their personal finances also improved this month.
Sinking sentiment on the economy is likely to play a crucial role in the midterm elections this November, which will be crucial in determining whether Republicans will retain control of Congress.
A Times/Siena poll published in late May found that US voters felt poorly about the direction of the country and its economy, with nearly 76% rating today’s economic conditions as fair or poor. A little over half said that they didn’t think the war in Iran would be worth the costs, and nearly two-thirds, including 73% of independent respondents, believed that going into the Middle East conflict was the wrong decision.
The economy and the rising cost of living has already proved to be a prominent campaigning issue: several candidates in key races have made it their marquee issue, including Graham Platner in Maine, James Talarico in Texas and Roy Cooper in North Carolina. Democrats have especially been trying to win back working-class voters, pushing forward a slate of former union leaders as candidates.
The White House applauded the latest consumer sentiment figures and took credit for the economy’s resilience.
“Despite temporary disruptions from Iran’s attempts to control the Strait, the American economy remains resilient thanks to this administration’s pro-growth agenda,” Kush Desai, a White House spokesperson, said in a statement.