At a Glance

What Is the University of Michigan Consumer Sentiment Survey?

The University of Michigan’s Surveys of Consumers is one of the longest-running and most closely watched measures of US consumer confidence. Conducted by the Survey Research Center at the University of Michigan, the survey has been carried out continuously since 1946 and covers approximately 600 respondents per month drawn from the contiguous United States. Participants are asked about their personal financial situations, their expectations for the broader economy, and their attitudes toward major purchases such as cars and homes.

The survey produces three main indices: the Index of Consumer Sentiment (the headline figure), the Index of Current Economic Conditions, and the Index of Consumer Expectations. The headline sentiment index is a weighted combination of the current conditions and expectations components, indexed to a 1966 base of 100. Readings above 80 historically indicate strong consumer confidence; readings below 60 suggest significant pessimism, with readings below 50 being associated with recessionary consumer psychology.

The University of Michigan publishes two readings per month: a preliminary estimate (typically released on the second Friday of the month) and a final estimate (typically released on the last Friday), incorporating additional survey responses. Financial markets focus primarily on the final reading. The inflation expectations components within the survey, particularly the one-year and five-year inflation expectations, also attract significant Fed attention as indicators of whether consumers believe inflation will persist.

Consumer Sentiment Release: July 31, 2026

The July 31 final reading will provide a definitive picture of consumer confidence in July 2026. By the time of this release, the preliminary July reading will have been available since approximately July 11, giving markets an initial estimate to work from. The final figure typically revises the preliminary by a modest amount, but significant revisions can occur when late-month survey data shifts the balance of responses materially.

The most recent final readings show a consumer sentiment index that has deteriorated sharply from mid-2025 levels. The May 2026 final reading of 44.8 represented a record low, surpassing the previous record lows seen during the 2022 inflation peak and the 2008-2009 financial crisis. The April 2026 reading of 49.8 had briefly suggested a stabilisation before May’s collapse. The June 2026 final (released June 27) will establish whether any recovery has taken place, with the July 31 release then confirming whether any bounce is sustained or reversed. No formal consensus forecast for July 2026 is yet available at time of writing.

Why This Consumer Sentiment Release Matters

Consumer confidence is a powerful predictor of future spending behaviour. When households feel pessimistic about their financial situation and economic prospects, they tend to defer large purchases, increase savings, and reduce discretionary spending. The record low readings in spring 2026 reflect a confluence of factors: elevated living costs from tariff-driven goods price inflation, energy price spikes linked to geopolitical tensions, and uncertainty about the economic outlook.

The FOMC Rate Decision July 2026 on July 29, two days before this release, will already have incorporated the preliminary July sentiment reading and other real-time indicators. However, the final July 31 consumer sentiment figure will still influence market expectations for the subsequent September Fed meeting. If sentiment remains at or near record lows, the case for rate cuts to stimulate household confidence and spending will strengthen.

The inflation expectations components are of particular significance to the Fed. The one-year ahead inflation expectation has been elevated in 2026, reflecting tariff-driven price increases and energy costs. If the July reading shows either a further rise in inflation expectations or a decline in confidence alongside stable or higher expectations, the Fed faces a dilemma between stimulating growth and anchoring expectations. A surprise easing in both sentiment and inflation expectations would be the most unambiguously positive outcome for policy flexibility.

What to Watch For

• Sentiment above 50 (recovery signal): A reading back above 50 from the record lows of spring 2026 would signal that consumer pessimism may be bottoming. Consumer discretionary equities, which have been pressured by weak confidence data, could respond positively, and the recovery narrative for household spending would gain traction.
• Sentiment in the range of 44 to 50 (stabilisation): A broadly unchanged reading from May and June levels would confirm that sentiment remains deeply depressed but not deteriorating further. Markets have likely already priced in weak consumer confidence, so stability could be interpreted as a mild positive.
• Sentiment below 44 (new record low): A further deterioration would represent an escalation of consumer pessimism and would increase recession fears. Defensive equities would likely outperform cyclicals, Treasury yields could fall on flight-to-safety buying, and rate-cut expectations for the remainder of 2026 would increase sharply.

Beyond the headline, watch the one-year inflation expectation. Readings above 5% are uncommon and would signal that consumers expect tariff-driven prices to persist for an extended period, creating risk of more entrenched inflation psychology. The current economic conditions sub-index and the buying conditions for major purchases are also useful: very low readings for durable goods buying conditions suggest consumers are postponing big-ticket expenditures, a forward-looking indicator for sectors like automotive and housing.

Historical Context

Source: University of Michigan Surveys of Consumers. Final monthly readings. Index benchmarked to 1966=100. Intermediate 2025 monthly readings not all available in verified sources at time of writing.

Market Positioning

Consumer sentiment data rarely drives large single-day moves in equity markets unless the reading is dramatically different from the preliminary estimate or represents a new extreme. However, in the current environment, where the record-low readings of spring 2026 have created a highly sensitised backdrop, any further deterioration would be treated as a significant negative signal. The July 31 release also coincides with month-end portfolio rebalancing, which can amplify price moves in either direction.

Options market positioning around major consumption-linked equities, including large retailers, restaurant chains, and e-commerce platforms, may reflect reduced volatility expectations if the preliminary July reading has already landed without surprises on July 11. Bond markets will be most sensitive to the inflation expectations sub-components, which feed directly into the market’s assessment of whether the Fed has the room to cut rates without risking inflation expectations becoming unanchored.

Related Events

• US University of Michigan Consumer Sentiment June 2026 – The June 26 final reading will establish the most recent prior trend before the July data.
• FOMC Rate Decision July 2026 – The Fed’s July 29 decision will incorporate the preliminary July sentiment reading and set the policy context two days before this release.
• US Retail Sales July 2026 – Released July 16, the retail sales data will give a concrete spending counterpart to the survey-based sentiment figures.

Frequently Asked Questions

What is the University of Michigan Consumer Sentiment survey?

It is a monthly survey of approximately 600 US adults conducted by the University of Michigan’s Survey Research Center. Since 1946, the survey has measured consumer attitudes toward personal finances, business conditions, and buying intentions. The Index of Consumer Sentiment is the headline output, with sub-indices tracking current conditions and future expectations. The survey also produces inflation expectation data that the Federal Reserve monitors closely.

What is the difference between the preliminary and final July readings?

The University of Michigan releases two readings per month. The preliminary estimate, based on approximately 60% of the final sample, is published around the second Friday of the month. The final estimate, incorporating all responses, is published on the last Friday. The July 31 release is the final reading, which supersedes the preliminary released around July 11. Revisions between preliminary and final are usually small but can occasionally be significant.

Why does the Federal Reserve monitor consumer sentiment?

Consumer sentiment surveys measure the expectations and intentions of households, which account for approximately 70% of US GDP. The inflation expectations components within the University of Michigan survey are of particular interest to policymakers, since expectations of future inflation can influence wage bargaining and pricing decisions and thereby become self-fulfilling. If consumers believe inflation will be persistent, they may demand higher wages and firms may raise prices proactively, entrenching the very inflation the Fed is trying to reduce.