The index now stands at 75.5, nearly two points higher than the 73.6 at the end of May.
The consumers' reading of current conditions and their expectations both improved. Consumer fears of inflation have also subsided substantially.
Analysts suggest that the sharp improvement in the index may hint at improvements in the job market.
The improvement in consumer sentiment was despite disappointing May retail sales, which fell 1.2%, according to a U.S. Department of Commerce report. The decline followed two months of growth0.6% in April and 2.1% in March.
Sales of building materials suffered the biggest monthly decline, 9.3%. However, category sales jumped 8.4% in April and 8.1% in March, which puts the May loss in a different perspective.
Year over year, retail sales in March were up 6.9%