Preliminary data released by the University of Michigan on Friday showed a bigger than expected rebound in U.S. consumer sentiment in the month of June.
The report said the consumer sentiment index climbed to 86.4 in June after falling to 82.9 in May. Economists had expected the index to rise to 84.0.
"The early June gain was mainly among middle and upper income households and for future economic prospects rather than current conditions," said Surveys of Consumers chief economist Richard Curtin.
He added, "Stronger growth in the national economy was anticipated, with an all-time record number of consumers anticipating a net decline in unemployment."
The index of consumer expectations jumped to 83.8 in June from 78.8 in May, while the current economic conditions index inched up to 90.6 from 89.4.
On the inflation front, the report said one-year inflation expectations slid to 4.0 percent in June after spiking to 4.6 percent in May. Five-year inflation expectations also fell to 2.8 percent from 3.0 percent.
Despite the pullback in the expected rate of inflation, Curtin noted rising inflation remained a top concern of consumers.
"Spontaneous references to market prices for homes, vehicles, and household durables fell to their worst level since the all-time record in November 1974," Curtin said. "These unfavorable perceptions of market prices reduced overall buying attitudes for vehicles and homes to their lowest point since 1982."
He added, "Fortunately, in the emergence from the pandemic, consumers are temporarily less sensitive to prices due to pent-up demand and record savings as well as improved job and income prospects."