Gas-price relief lifts consumer mood, but momentum faces headwinds

Lower gas prices boosted the University of Michigan’s consumer sentiment index by about 10% to 54.4, the highest since February, with gains across age, income, wealth, and political group, though sentiment remains below a year ago. The relief could be short-lived amid ongoing Middle East tensions and energy-price volatility. June retail spending rose 0.2% (0.7% excluding gas), unemployment stood at 4.2%, and inflation expectations for the coming year fell to 4.2% from 4.6%, but remain well above pre-crisis levels. Economists caution that sentiment hasn’t consistently predicted spending in recent years.