American consumers are feeling a bit more optimistic, thanks to a break at the pump and some clever budget shuffling. The latest Morning Consult Index of Consumer Sentiment climbed 1.8 points to reach 90.3 among adults.

Economic Rebound

This economic rebound was largely driven by higher-income households, whose specific sentiment index jumped 4.7 points to a strong 111.2. The catalyst for this sudden relief was international diplomacy: an agreement by Iran to reopen the critical Strait of Hormuz, which immediately pulled back global oil prices.

Interestingly, while cheaper gas eased immediate pressure on consumers, it did not change their long-term views on the economy. Morning Consult’s Indirect Consumer Inflation Expectations held perfectly steady at 4.8% across all income brackets.

Consumer Spending

Forecasters expect Thursday’s federal report to show a modest bump in May’s real consumer spending, building on a stronger-than-expected retail sales report. Part of that strength comes from a declining savings rate, meaning families are drawing down their financial cushions to keep buying things.

However, underlying data reveals another major factor at play: Americans are spending less of their total wallets on housing. The share of the typical consumer budget dedicated to housing fell about 4 to 5 percentage points from its late-2024 peak down to around 35% this May.

This shift does not mean housing has suddenly become affordable. Instead, it reflects structural changes that followed the Federal Reserve’s aggressive interest rate hikes. Between mid-2022 and late 2025, low- and middle-income Americans moved toward renting by about 5 percentage points to dodge peak mortgage costs.

Original reporting: Tampa Free Press — read the source article.