The final University of Michigan Consumer Sentiment for August came in at 96.2, up from the August preliminary of 95.3 and down from the July final of 97.9.

The Nasdaq/Bloomberg consensus range was 94.0 to 96.0 (consensus 95.3)

Surveys of Consumers chief economist, Richard Curtin, makes the following comments:

Although there was a small uptick in late August, consumer sentiment remained at its lowest level since January. Most of the August decline was in the Current Economic Conditions Index, which fell to its lowest level since November 2016. These results stand in sharp contrast to the recent very favorable report on growth in the national economy. 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. Future income and job certainty have become the main reasons cited by consumers for their positive spending views (see the chart). This shift from attractive prices and interest rates to income is typical of the later stages of expansions, with references to income and job certainty peaking just before downturns. While nominal wage expectations and employment gains have remained strong, the anticipated inflation rate has also increased to its highest level in four years. Although a higher inflation rate is partly due to the potential for increased tariffs, the main cause has been the expectation of robust economic growth. Luckily, consumers have not yet judged the current rate of inflation as a significant source of erosion in their living standards or as a cause to reduce their buying plans. Achieving a soft-landing is always difficult, and especially so when monetary policy must lean against expansionary fiscal policies. Personal consumption can be expected to grow by 2.6% in the year ahead.

Source.

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