University of Michigan Reports 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 rose to a reading of 67.9 in August, up from 66.4 in July. This is a month-over-month increase of 2.3% but down 2.2% year-over-year (69.4 in August 2023).
• Current Economic Conditions dropped to a reading of 6.9 in August, down from 62.7 in July. This is a month-over-month decline of 2.9% and down 19.3% year-over-year (75.5 in August 2023).
• The Index of Consumer Expectations climbed to a reading of 72.1 in August, up from 68.8 in July. This is a month-over-month increase of 4.8% and up 10.2% year-over-year (65.4 in August 2023).

In remarks and analysis prepared to accompany the release of the final August results, Surveys of Consumers Director Joanne Hsu said:

“Consumer sentiment confirmed its early-month reading; after drifting down for four months, sentiment inched up 1.5 index points above July and is currently 36% above the all-time historic low from June 2022. Consumers’ short- and long-run economic outlook improved, with both figures reaching their most favorable levels since April 2024 and a particularly sizable 10% improvement for long-run expectations that was seen across age and income groups. Sentiment this month reflects a slight rise in sentiment among Independents, as Democrats and Republicans offset each other almost perfectly. Democrats exhibited a large 10% increase in sentiment while Republicans posted an equally sized decline. These patterns resulted from a sea change in election expectations this month with Harris emerging as the Democratic candidate for president. In July, 51% of consumers expected Trump to win the election versus 37% for Biden. In August, election expectations flipped; 36% expected Trump to win compared with 54% for Harris. Economic and election expectations are both subject to change as election day approaches.”