U.S. consumer sentiment rises to 54.4 in July, highest since February

U.S. consumer sentiment climbed to a five-month high in July, with the University of Michigan's Consumer Sentiment Index rising to 54.4 from 49.5 in June, above economists' Reuters-polled forecast of 51.0. The gain was broad across age, income, wealth and political groups, Joanne Hsu said, but sentiment remained 12% below a year earlier, underscoring that households are still uneasy about high prices. The survey was conducted from June 23 to July 13, and more than 70% of interviews were completed before the collapse of the ceasefire between the U.S. and Iran last week pushed oil to a one-month high and lifted gasoline prices. One-year inflation expectations eased to 4.2% from 4.6%, while five-year expectations held at 3.3%. Pantheon’s Samuel Tombs said the reading was above economists’ 50.5 forecast and that falling inflation expectations offered some comfort to the Federal Reserve, while weak worker bargaining power made a wage-growth pickup from the recent rise in headline inflation unlikely. The report suggests the improvement may be temporary if the recent rebound in gas prices continues, even as government data this week showed consumer inflation moderated in June.