University of Michigan Releases Final Results of Its Consumer Sentiment Index for August

On Friday, the University of Michigan released the final results of its Surveys of Consumers for August.

• The Index of Consumer Sentiment fell to a reading of 51.7 in August, down 6.3% from 55.2 in July. Year-over-year, the index was down 11.2% from 58.2 in August 2025.
• Current Economic Conditions fell to a reading of 51.9, down 5.3% from 54.8 in July and 15.9% lower year-over-year.
• The Index of Consumer Expectations fell to 51.5, down 7.0% from 55.4 in July and 7.9% from 55.9 in August 2025.

In remarks accompanying the release, Surveys of Consumers Director Joanne Hsu said:

“Consumer sentiment confirmed its early month reading, falling about 6% from last month and landing about 11% below a year ago amid continued worries that inflation will remain elevated for the foreseeable future. Sentiment declines in August were seen for all political groups and were particularly acute among Republicans. Moreover, groups who are typically less-equipped to absorb increases in cost of living also exhibited stronger decreases in sentiment, including older consumers, lower- and middle-income consumers, and those with no stock holdings. With ongoing policy uncertainty including the Iran conflict, consumers anticipate further increases in gasoline prices both in the short and long run. In addition to the pocketbook issues that have been central to consumers’ views of the economy, they are increasingly worried that prospects elsewhere in the economy could be weakening. Expected year-ahead business conditions fell back 10%, along with a 13% drop for the five-year horizon. Any re-escalation of trade tensions will likely exacerbate these trends. This release covers interviews completed between July 28 and August 24.

Year-ahead inflation expectations ticked down from 4.2% in July to 4.0%. The current reading substantially exceeds the 3.4% seen in February before the Iran conflict began, along with all 2024 readings. Long-run inflation expectations held steady at 3.3% for the third consecutive month, remaining a bit higher than its 2024 range of 2.8–3.2%.”