Americans are feeling better about the economy. U.S. consumer sentiment improved 8% in June — its highest level in four months — according to preliminary results from the University of Michigan’s index of consumer sentiment released Friday.

What You Need To Know

  • U.S. consumer sentiment about the economy improved 8% in June, according to preliminary results from the University of Michigan's index of consumer sentiment

  • Researchers attributed the optimism to the easing of inflation and policymakers resolving the debt ceiling crisis earlier this month

  • Consumer sentiment is the highest it's been in four months but remains low by historical standards

  • Household incomes are expected to grow more slowly than household spending in the coming year, according to the Federal Reserve Bank of New York

Researchers attributed the improved optimism to the easing of inflation and policymakers resolving the debt ceiling crisis earlier this month. The consumer price index rose at a 4% annual rate in May, the U.S. Bureau of Labor Statistics said earlier this week — the lowest rate of inflation in two years.

“Sentiment is now 28% above the historic low from a year ago and may be resuming its upward trajectory since then,” the university’s Surveys of Consumers Director Joanne Hsu said in a statement. “As it stands, though, sentiment remains low by historical standards as income expectations softened.”

The latest survey of consumer expectations released this week from the Federal Reserve Bank of New York found household incomes are expected to grow just 3.3% over the next 12 months while household spending are expected to increase 5.6%. The Federal Reserve said perceptions of credit access compared with a year ago deteriorated slightly last month, with many households reporting it was more difficult to obtain credit.