US Consumer Sentiment Falls to 51.7 in August, Inflation Outlook Eases
This digest was compiled by AI from multiple sources — links to the originals are below.
US consumer sentiment fell to 51.7 in August, the first decline in three months, according to the University of Michigan. Consumers expect prices to rise 4% over the next year, the lowest since March. The drop reflects a worsening economic outlook even as inflation expectations eased.
Key Facts
- The University of Michigan's sentiment index fell to 51.7 in August from 55.2 in July.
- Consumers expect prices to rise at an annual rate of 4% over the next year, the lowest since March.
- Sentiment among Republicans slumped to the lowest since November 2024.
- Long-term inflation expectations over the next five to 10 years stand at 3.3% annually.
- National average gasoline prices held above $4 a gallon across August.
Sentiment Decline
The University of Michigan's sentiment index decreased to 51.7 in August, the first drop in three months. The final reading was slightly improved from the preliminary reading and above the median estimate in a Bloomberg survey of economists. Measures of current economic conditions and consumer expectations both declined from a month earlier. Consumers' views about the economy in the year ahead and five years ahead deteriorated in August.
Inflation Expectations
Consumers expect prices to rise at an annual rate of 4% over the next year, the lowest reading since March but still historically elevated. In the longer term, consumers see overall prices climbing at an annual rate of 3.3% over the next five to 10 years. Joanne Hsu, director of the survey, said consumers continue to worry that inflation will remain elevated for the foreseeable future. Hsu added that consumers are increasingly worried that prospects elsewhere in the economy could be weakening.
Economic Pressures
The drop in sentiment shows households continue to face pressure from elevated costs as the conflict in the Middle East drags on. National average gasoline prices held above $4 a gallon across August, and broader inflation has eroded incomes. Hsu said consumers expect higher prices at the pump in the future, too. Sentiment among Republicans slumped to the lowest since November 2024.
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US Consumer Sentiment Falls to 51.7 in August, Inflation Outlook Eases
