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US consumer sentiment falls sharply in August on inflation worries
University of Michigan results showed Current Conditions at 51.8 and Expectations at 50.6, while one-year inflation expectations edged up to 4.3%.
US consumer sentiment deteriorated sharply in August, reinforcing concerns that household confidence is weakening even as inflation remains a key worry, according to Action Forex. The University of Michigan Consumer Sentiment index fell from 55.2 to 51.0, below the 54.1 consensus estimate. Current Conditions dropped from 54.8 to 51.8, and Expectations declined from 55.4 to 50.6.
The survey also pointed to softer views on the broader outlook, with expected business conditions falling 11.0% for the short run and 17.0% for the long run, the outlet said. Weakness was described as particularly pronounced among older, lower-income, and non-college consumers.
Inflation expectations moved in opposite directions, Action Forex reported. One-year expectations rose from 4.2% to 4.3%, while long-run expectations held at 3.3% for a third straight month, and only 8% of consumers expect income growth to exceed inflation over the next year, down from 18% in December 2024. The outlet said the mix of weakening sentiment and still-elevated inflation expectations could complicate the Fed’s near-term interpretation of demand versus disinflation progress.