Consumer Sentiment: Sharply Higher

Bottom Line:  The University of Michigan's consumer sentiment index rose sharply more than expected in the preliminary reading for July. Hitting the highest levels since 2021 and before the spike in consumer price inflation, the survey revealed that all but the lowest-income demographic saw more positive outlooks. While the level of inflation expected was nearly unchanged, most consumers felt better about inflation and reported stable labor conditions. Overall, the report showed a marked shift in consumers' outlooks for the better, suggesting continued positive growth in consumer spending in the 2nd Half.