Tariff-Driven Economic Anxiety Eased In June

People are less worried that President Donald Trump’s tariff campaign will push up prices, though American consumers remain pessimistic by historical standards.

The University of Michigan’s Index of Consumer Sentiment, a survey of how people feel about the economy and their finances, rose in June for the first time in six months, the university said Friday.

The index rose 16% in June compared to May, according to a preliminary survey, but was still 20% below its level in December 2024. At a level of 60.5 in June, the index is still below the typical range of about 100 before the pandemic.

Feelings about most aspects of the economy, including inflation, improved amid news about trade talks possibly defusing the high tariffs that Trump has imposed in recent months. Economists closely watch measures of how people feel about the economy because sentiment can affect how much people are willing to spend. Consumer spending is the cornerstone of the economy, making up about 68% of the GDP.

“It’s welcome news to see a pickup in consumer sentiment after months of decline,” Heather Long, chief economist at Navy Federal Credit Union, wrote in a commentary. “Americans are relieved to see President Trump paring back his trade war and tariffs, but they remain on high alert for price increases at the store and gas pump.”

The decreased consumer pessimism echoes that of professional economists, many of whom have pared back their projections for how much damage Trump’s tariffs will cause the economy. Economists at Oxford Economics reduced their projected chances of a recession in the next year to 35% Thursday, though still over the baseline 15% chance of a recession in any given year.

The details of the survey had at least one red flag suggesting quite a bit of anxiety is still brewing. The share of people who said they’d be worse off financially in a year rose to 44% from 40% in May, eclipsing the 32% who expected to be better off. That was the highest share of people expecting to be worse off in the history of the survey going back to 1978.

 “It’s unsettling how many Americans believe they will be financially worse off in a year,” Long wrote.

Official measures of inflation have so far been milder than expected, and the job market has stayed resilient. Still, forecasters are bracing for the tariffs to drag down employment and push up inflation later in the year, as more companies pass along the cost of the import taxes on to customers.

This article was updated after publication to add information about the percentage of people expecting to be financially worse off in a year.