Surveys of Consumers Director Joanne Hsu characterized the results as “little changed” from June, “inching up about one index point.” She acknowledged that it’s a five-month high, but “it remains a substantial 16% below December 2024 and is well below its historical average.” A closer look at the data shows that high-wealth consumers don’t share in the generally improving outlook, either.
Short-run business conditions improved about 8%, whereas expected personal finances fell back about 4%. Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen, for example if trade policy stabilizes for the foreseeable future. At this time, the interviews reveal little evidence that other policy developments, including the recent passage of the tax and spending bill, moved the needle much on consumer sentiment. But there has been a movement on expectations around inflation.
One of the most pronounced shifts in sentiment concerns inflation. Year-ahead inflation expectations dropped for the second straight month to 4.4%, down from 5.0% in June and from a peak of 6.6% in May, marking the lowest reading since February 2025.
For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.
