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 Monitoring trends for over 75 years

July 2025 survey results August 1, 2025
Joanne Hsu, PhD, Director
Consumer sentiment improved for the second straight month, inching up
a scant single index point from June. Current conditions rose about 5% to
its highest reading since February 2025, while the expectations index fell
slightly. A rise in sentiment among stock holders was partially offset by a
decline among consumers who do not own stocks . Perceptions of this
month’s economic developments were similar across the political
spectrum; Republicans, Independents, and Democrats all saw some minor
increases in sentiment this month. Although recent trends show sentiment
moving in a favorable direction, sentiment remains broadly negative.
Consumers are hardly optimistic about the trajectory of the economy, even as their worries have softened since April 2025.
Year-ahead inflation expectations fell for a second straight month, plunging from 5.0% last month to 4.5% this month. This
is the lowest reading since February 2025 but above December 2024 just after the election. Long-run inflation expectations
receded for the third consecut ive month, falling back from 4.0% in June to 3.4% in July. This is the lowest reading since
January 2025 but, again, still considerably higher than the December 2024 reading.
Labor market expectations improved just a touch but remain considerably weaker than a year ago. About 57% of consumers
expect unemployment to rise in the year ahead, down from the two-thirds seen in March and April, but well above the 35%
seen a year ago (see chart, red solid line). Aside from the last five months, this is the highest reading since 2009. Moreover,
consumers continue to perceive elevated risks of personal job loss (see chart, black dotted line). Expectations of own
incomes remain extremely low and are less than half of what was seen in December 2024.
Sentiment this year has tracked  the salience of tariffs to  consumers. The share of consumers spontaneously offering
comments about tariffs has fallen from a height of two-thirds of consumers in May to 57%, still a solid majority, in July.
While tariff policy appears to be stabilizing below the levels threatened in April, recent announcements include tariff rates
that are still very high from a historical perspective. Tariff concerns are particularly strong among higher -income, high-
stock-wealth, and college-educated consumers. These consumers note that their personal finances have been boosted by
strong asset values, but their personal views of the economy are still relatively gloomy, which presents its own risks given
their large contribution to aggregate spending.
Overall, the survey reveals risks to both of the Fed’s mandates. While inflation expectations have fallen considerably from
the initial shock of the April tariff threats, they remain notably higher than the pre-pandemic period. Consumers clearly do
not believe that the risk of accelerating inflation has passed. Meanwhile, expectations remain poor for business conditions
and elevated for unemployment; critically, consumers anticipate they may be personally affected. Despite recent
improvements, this combination of views is consistent with a slowdown in spending, as consumers may respond to these
risks with more cautious financial behavior. At the same time, a cautionary pullback in spending could potentially mediate
any inflationary effects of tariffs.
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul
2024 2024 2024 2024 2024 2024 2025 2025 2025 2025 2025 2025 2025
Index of Consumer Sentiment 66.4 67.9 70.1 70.5 71.8 74.0 71.7 64.7 57.0 52.2 52.2 60.7 61.7
Current Economic Conditions 62.7 61.3 63.3 64.9 63.9 75.1 75.1 65.7 63.8 59.8 58.9 64.8 68.0
Index of Consumer Expectations 68.8 72.1 74.4 74.1 76.9 73.3 69.5 64.0 52.6 47.3 47.9 58.1 57.7
Index Components
Personal Finances - Current 79 79 80 81 82 85 87 82 74 71 67 78 83
Personal Finances - Expected 105 108 111 110 116 111 109 99 86 78 79 94 91
Economic Outlook - 12 Months 86 88 93 92 97 88 81 73 56 48 50 63 66
Economic Outlook - 5 Years 84 92 94 95 96 94 88 83 66 60 60 74 72
Buying Conditions - Durables 81 78 82 85 82 108 106 86 89 82 83 88 91
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1997 2001 2005 2009 2013 2017 2021 2025
Probability of Losing a Job During the
Next 5 Years (3-Month Movng Average)
% of Consumers Expecting More Unemployment
During the Next Year (3-Month Moving Average)
Despite Recent Improvements, Consumers Still
Anticipate Rising Unemployment and Elevated
Risks of Personal Job Loss