US consumer sentiment rises in July after oil price dip

US consumer sentiment rose in July to its highest level since February after a temporary drop in oil prices, preliminary University of Michigan data showed. The survey's consumer sentiment index reached 54.4 points, nearly 10 percent above June's reading.

The improvement followed a fall in energy prices in June after hopes of a longer-term ceasefire between the United States and Iran, following an initial deal between the two sides. The source said fighting has since resumed, with US President Donald Trump declaring the ceasefire over and oil prices rising again.

Joanne Hsu, director of the University of Michigan survey, said the upward momentum may be difficult to maintain if recent declines in gasoline prices continue to reverse. She said interviews for the July release were conducted from June 23 to July 13, and more than 70 percent were completed before the United States resumed strikes against Iran on July 7.

Hsu said consumers remained far from highly positive about the economy because prices were still frustratingly high. She said sentiment was down 12 percent from a year earlier.

The source said US-Israel strikes targeting Iran since late February had pushed the Middle East into war and sent global energy prices higher as Tehran retaliated by virtually closing the Strait of Hormuz, a key energy transit waterway. Higher costs have fed through the US economy as gasoline prices rose.

The current average price of regular gasoline is $3.98 per gallon, compared with $3.16 per gallon a year earlier. Year-ahead inflation expectations fell to 4.2 percent in July from 4.6 percent in June, but Hsu said they remained elevated.