Americans are feeling better about the economy, according to a new report.

What You Need To Know

  • Consumer sntiment increased 11% in July compared with June, according to the University of Michigan consumer survey

  • Sentiment hasn't been this high since October 2021

  • Consumers are feeling especially positive about long- and short-term business conditions

  • Lower-income consumers were the exception to improving sentiment, expeccting that inflation and income will both worsen

Consumer sentiment increased for a second straight month in July, increasing 11% compared with June, according to a University of Michigan consumer survey released Friday. Consumer sentiment hasn’t been as high since October 2021.

Researchers attributed the sharp increase in sentiment to a slowdown in inflation and stability in labor markets, despite the U.S. Federal Reserve raising interest rates for the 11th time in 17 months this week.

The annual inflation rate in the U.S. fell to 3% in June while the unemployment rate dropped to 3.6%, according to the U.S. Bureau of Labor Statistics.

Consumers felt especially positive about long- and short-term business conditions.

The survey noted that lower-income consumers were the exception to improving sentiment. Their attitude about the economy fell in anticipation that inflation and their income will both worsen in the coming year.