US consumer mood improves, but gas prices cloud July reading

Consumer sentiment in the University of Michigan survey continued to recover during responses collected from June 23 to July 13, according to an Econbrowser analysis of the latest survey data. The period largely came before a renewed rise in gasoline prices, a timing issue that may affect how investors and policymakers read the July final result.

The analysis compared the University of Michigan economic sentiment measure with the Conference Board’s Consumer Confidence Index and Gallup’s confidence gauge. To place the series on the same scale, the author demeaned each index and divided it by its standard deviation over the period from January 2021 through February 2025, using data from the University of Michigan, Gallup and the Conference Board.

That standardisation does not change the underlying survey responses. It converts different indices into comparable units, allowing changes in each series to be viewed against its own recent history. Such comparisons can help show whether households are moving in the same direction across surveys that use different questions, sampling methods and index construction.

The chart cited by Econbrowser marked two recent reference points: “Liberation Day” and the start of the US-Iran War. The analysis described the latest Michigan reading as part of a continued rebound, while the headline framing remained cautious about the overall level of consumer mood.

Inflation expectations were also part of the July release. Econbrowser displayed the University of Michigan’s one-year expected CPI inflation series, with the same reference markers. The Michigan inflation-expectations measure is closely watched because it offers a survey-based view of how households expect prices to change over the next year, a factor central banks monitor alongside realised inflation and market-based measures.

The timing of the survey window is material. Econbrowser noted that the July readings reflect answers gathered from June 23 through July 13, when gasoline prices were relatively low. Fuel prices are visible to households and can influence both assessments of current financial conditions and near-term inflation expectations.

Because gasoline prices resumed rising after much of the survey had already been collected, Econbrowser’s author said the final July Michigan reading could come in with weaker sentiment and higher inflation expectations than the preliminary results implied. That view was presented as the author’s expectation, not as a confirmed outcome.

The analysis also pointed readers to work by Hsu on web bias in the Michigan survey. Survey mode and sample composition can affect reported sentiment, particularly when responses are gathered online rather than through other methods. Econbrowser did not present that issue as invalidating the latest figures, but flagged it as relevant context for interpreting the Michigan data.

For markets, the release adds to a mixed picture: household sentiment has improved from recent lows in the surveyed period, while inflation expectations remain a focus and energy prices may alter the final July signal. The next reading will show how much of the later fuel-price move was reflected in consumers’ responses.

This story draws on original reporting from Econbrowser.