Consumer Sentiment in U.S. Fell Less Than Forecast in August
(Bloomberg) -- U.S. consumer sentiment fell by less than expected in August on a more positive outlook for the economy amid a strong job market, a University of Michigan report showed Friday.
Highlights of Michigan Sentiment (August, Final)
A gauge of buying conditions for long-lasting goods decreased to the lowest since 2015 amid rising prices and interest rates, the survey showed. At the same time, income expectations and job certainty have become the main reasons cited by consumers for positive views on spending.
Inflation expectations for the coming year matched the highest since 2014. They were higher for those who saw a negative impact from tariffs compared with respondents who didn’t mention levies, the survey showed.
Sentiment has been pulling back from loftier levels earlier this year amid trade tensions and rising inflation that’s eating away at Americans’ wallets. Nonetheless, a strong economy, record highs in the stock market and one of the best labor markets in decades are seen helping to support healthy consumer spending.
Personal finances remained “very favorable” as 55 percent of households cited recent financial gains and near record numbers mentioned improving household wealth, according to the survey.
“These results stand in sharp contrast to the recent very favorable report on growth in the national economy,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement. “The dominating weakness was related to less favorable assessments of buying conditions, mainly due to less favorable perceptions of market prices and to a lesser extent, rising interest rates.”
- Expected change in prices during the next year edged up to 3 percent from 2.9 percent in July
- Inflation rate over next five to 10 years seen at 2.6 percent, up from 2.4 percent the month prior
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