University of Michigan Releases the 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 declined to a reading of 58.2 in August, down from 61.7 in July. This is a month-over-month decline of 5.7% and 14.3% lower than a year ago (67.9 in August 2024).
• Current Economic Conditions dropped to a reading of 61.7 in August, down from 68.0 in July. This is a month-over-month decline of 9.3% but 0.7% above a year ago (61.3 in August 2024).
• The Index of Consumer Expectations fell to a reading of 55.9 in August, down from 57.7 in July. This is a month-over-month decrease of 3.1% and 22.5% lower than a year ago (72.1 in August 2024).

In remarks prepared to accompany the report, Surveys of Consumers Director Joanne Hsu said:

Consumer sentiment confirmed its early-month reading, moving down about 6% from July. Sentiment now stands about 11% above readings from April and May but remains at least 10% below 6 and 12 months ago. This month’s decrease was visible across groups by age, income, and stock wealth. Moreover, perceptions of many aspects of the economy slipped. Buying conditions for durable goods subsided to their lowest reading in a year, and current personal finances declined 7%, both due to heightened concerns about high prices. Expectations for business conditions and labor markets contracted in August as well. That said, expectations for personal finances held steady this month, albeit at relatively subdued levels relative to a year ago. This month, few consumers spontaneously mentioned the recent events at the Bureau of Labor Statistics and the Federal Reserve (interviews closed on Monday, August 25, the day Trump announced he was firing Governor Cook).

Year-ahead inflation expectations moved up from 4.5% last month to 4.8% this month. This rise was seen across multiple demographic groups. Independents and Republicans both exhibited month-over-month increases; expectations for Democrats were unchanged from July. Long-run inflation expectations edged up from 3.4% in July to 3.5% in August. This month ended two consecutive months of receding inflation for short-run expectations and three straight months for long-run expectations. Still, both readings remain well below the highs seen briefly in April and May 2025.”