Consumer Sentiment Has Dropped in August, per Michigan Survey

By Matt Grossman

Consumers' economic mood is weaker this month versus July, according to preliminary results from the University of Michigan's monthly survey.

The survey's sentiment index declined to 51, from 55.2 in July, according to results published Friday. The report reflects a preliminary August reading. A final number, reflecting more survey results, will come at the end of the month. Economists polled by The Wall Street Journal were expecting a reading of 54.5.

The August drop leaves sentiment above the historic lows in the mid-40s touched earlier this year. But persistent price increases and concerns about the economic effects of the Iran conflict are still weighing on shoppers, according to the survey's director, Joanne Hsu.

She noted that sentiment among Republicans, which has tended to reflect support for President Trump's agenda, is down more than 19% from just before the war began, and is at its lowest level since the 2024 election.

"Across all consumers, only 8% expect their income growth to exceed inflation in the year ahead ... a reflection of the belief that high prices will continue to be burdensome," she wrote.

Still, consumers' forecasts of inflation over the longer term were flat from July, a welcome signal to Federal Reserve policymakers who worry that persistent price increases will become even more entrenched if consumers expect them to continue.

Write to Matt Grossman at matt.grossman@wsj.com

(END) Dow Jones Newswires

August 14, 2026 10:35 ET (14:35 GMT)