The Zhitong Finance App learned that the latest preliminary data released by the University of Michigan in the US shows that, benefiting from improvements in economic and inflation expectations, the US consumer confidence index rose to its highest level in five months in July.

According to the data, the initial value of the consumer confidence index in July was 61.8, up from 60.7 in June. Despite this, the overall level of confidence was still lower than the level for most of last year.

In terms of inflation expectations, respondents expect prices to rise at an annual rate of 4.4% over the next year, down from 5% last month, the lowest level since February this year. Meanwhile, consumers expect prices to rise by an average of 3.6% per year in the next five to ten years, which is also the lowest value in five months.

Despite a slight recovery in confidence, consumer concerns about the economic outlook have not completely dissipated, and uncertainties relating to tariffs in particular continue to limit overall optimism. “Compared to a year ago, consumer expectations for the business environment, labor market, and even personal income are still weak.” Joanne Hsu, head of the Consumer Research Program at the University of Michigan, said in a statement, “However, the recovery in confidence Index over the past two months shows that consumers think the risk of the worst-case scenario they feared in April and May has been mitigated.”

Hsu also pointed out that current consumers’ views on their own financial situation have improved, which may be driven by the rise in the stock market. It is worth mentioning that the investigation ended on July 14, later than former US President Donald Trump signed a new budget bill, which extended tax cuts and provided new tax benefits to part-time tip earners.

However, Hsu also warned that if new tariff measures or signs of rising inflation again appear, it may dampen consumers’ confidence.

Looking at the sub-indicators, the current status index rose to 66.8 from 64.8 last month, while the expected index rose slightly to 58.6. This rise in consumer confidence was mainly driven by improved sentiment among supporters of the Republican Party and independent voters.