American consumers are feeling slightly less terrible about the economy. After months of record-low sentiment readings driven by oil shocks and geopolitical chaos, it is at least a direction change worth noting.
The University of Michigan’s preliminary Consumer Sentiment Index for July 2026 came in at 54.4, up from a June final reading of 49.5. That is a 9.9% gain in a single month, and it marks the highest reading since February 2026. It also beat analyst expectations, which had been clustered around 51.0.
How we got here
The story behind the number is largely a story about gasoline prices. When fuel gets cheaper, household budgets breathe a little easier, and that tends to show up quickly in sentiment surveys.
In May 2026, the index hit a record low of 44.8, driven by a surge in oil and gas prices tied to escalating tensions in the US-Iran conflict. This is now the second consecutive month of roughly 10% gains in the index.
