(RTTNews) - Preliminary data released by the University of Michigan on Friday showed consumer sentiment in the U.S. has deteriorated by much more than anticipated in the month of August.
The University of Michigan said its consumer sentiment index tumbled to 51.0 in August after surging to 55.2 in July. Economists had expected the index to dip to 54.2.
"Although the early-month weakening in sentiment was pervasive across various demographic groups, notably large reductions were seen among older consumers, lower-income consumers, and those without a college degree," said Surveys of Consumers Director Joanne Hsu.
She added, "These groups are all particularly vulnerable to any erosion of purchasing power stemming from inflation."
The report also said the current economic conditions index slid to 51.8 in August from 54.8 in June, while the index of consumer expectations slumped to 50.6 in August from 55.4 in June.
"While views of personal finances saw only minor declines, expected business conditions sank 11% for the short run and 17% for the long run," said Hsu.
On the inflation front, the University of Michigan said year-ahead inflation expectations ticked up to 4.3 percent in August from 4.2 percent in July.
Hsu noted the current reading substantially exceeds the 3.4 percent seen in February before the Iran conflict began, along with all 2024 readings.
Long-run inflation expectations held steady at 3.3 percent for the third consecutive month, remaining a bit higher than the 2024 range of 2.8 to 3.2 percent, the report said.
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