U.S. Consumer Sentiment Fell in August as Inflation Eases — University of Michigan

By Ed Frankl

Sentiment among U.S. consumers weakened slightly in August, as some of the recent improvement in the economy lost momentum after inflation hotted up a little.

The final reading of the consumer sentiment index dipped to 69.5 in August from 71.6 in July, according to data from a survey carried out by the University of Michigan released Friday.

Economists polled by The Wall Street Journal expected the indicator to be at 71.2, the same as preliminary estimates made in mid-August. July's level is the highest for a full month since October 2021, according to the data.

After rising sharply for the past several months, consumer sentiment moved more sideways in August, according to survey director Joanne Hsu.

"Consumers perceive that the rapid improvements in the economy from the past three months have moderated, particularly with inflation, and they are tentative about the outlook ahead," Hsu added.

U.S. annual inflation accelerated to 3.2% in July, from 3.0% in June, although core inflation, which signals underlying pressures in the economy, ticked down to 4.7% in July from June's 4.8%.

Readings for current economic conditions and consumer expectations both ticked down slightly on month, the data showed.

Overall, inflation expectations for the next five years--a closely watched indicator for Federal Reserve officials--were unchanged from June and July at 3.0%.

Write to Ed Frankl at edward.frankl@wsj.com

(END) Dow Jones Newswires

August 25, 2023 10:36 ET (14:36 GMT)

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