Consumer sentiment declined in August, with perceptions of current economic conditions and expectations for future improvements falling too. .The three readings fell by mid-single digits from July, and overall sentiment was 11 percent lower than a year ago in the latest University of Michigan Surveys of Consumers.August sentiment fell 6 points to 51 percent, with marks for current conditions and future expectations falling 5 percent and 7 percent, respectively.Survey Director Joanne Hsu cited consumer concerns that inflation would remain elevated for the foreseeable future. She said sentiment declined across political groups “but were particularly acute among Republicans.” Stronger sentiment decreases were also noted among groups who have a harder time adjusting to cost-of-living increases, “including older consumers, lower- and middle-income consumers, and those with no stock holdings.”Hsu said that “with ongoing policy uncertainty including the Iran conflict, consumers anticipate further increases in gasoline prices both in the short and long run.”Consumers also expressed concerns that the broader economy could weaken, with double-digit declines in their outlook for year-ahead business conditions (-10 percent) and the five-year horizon (-13 percent). And, while year-ahead inflation expectations decreased two basis points from July, they were still “substantially” ahead of readings gathered before the Iran conflict. Interviews were completed between July 28 and Aug. 24. An initial read on September sentiment will be released Sept. 11.
