US Consumer Sentiment Declines on Dimmer Views of Economic Outlook
MichelleUS consumer sentiment declined to a three-month low as tariff-related concerns about the economic outlook and inflation persisted.
US consumer sentiment declined to a three-month low as tariff-related concerns about the economic outlook and inflation persisted.
The final August sentiment index fell to 58.2 from 61.7 a month earlier, according to a University of Michigan survey released Friday. The preliminary reading was 58.6.
Consumers expect prices to rise at an annual rate of 4.8% over the next year, up from 4.5% last month, data released Friday showed. They saw costs rising at an annual rate of 3.5% over the next five to 10 years. That marked an improvement from the 3.9% seen in the preliminary survey earlier this month.
The figures underscore consumers’ anxiety about employment prospects and business conditions. About 63% of consumers expect unemployment to rise in the year ahead, an increase from the prior month and well above the same month in 2024. The August jobs report next week is projected to show employment growth remained moderate for another month.
Federal Reserve Governor Christopher Waller on Thursday said he would support an interest-rate cut in September and anticipates additional easing over the next six months to help bolster job prospects.
Unease about employment and household finances risks causing consumers, the primary source of economic growth, to pull back.
“Buying conditions for major purchases like durable goods and vehicles both worsened this month,’’ Joanne Hsu, director of the survey, said in a statement. “Growing shares of consumers mentioned high prices as well as tax/tariff considerations as factors weighing on buying conditions for cars in particular.”
However, government data released earlier on Friday showed consumer spending in July rose by the most in four months, boosted by income growth.
That report also highlighted the impact of price pressures on consumer sentiment. The so-called core personal consumption expenditures price index, which excludes food and energy, ticked up to 2.9% on an annual basis, the most since February.
The university's sentiment survey showed the expectations index dropped to a three-month low of 55.9 -- worse than the preliminary reading of 57.2. The current conditions gauge also fell from a month earlier, to 61.7.
The survey was conducted July 29 to Aug. 25.
