Michigan Consumer Confidence Falls In August, But Beats Expectations: Declining Inflation, Resilient Job Market Key Factors

The University of Michigan’s latest survey reveals a slight decrease in consumer confidence among Americans compared to July, yet it surpasses expectations.

US Consumer Sentiment Broadly Unchanged In August

The Michigan Consumer Sentiment Index edged down from 71.6 in July to 71.2 in the first two weeks of August, slightly above the projected 71, as per preliminary estimates. This figure still stands 22% higher than a year ago.

“Consumers perceived few material differences in the economic environment from last month, but they saw substantial improvements relative to just three months ago,” Surveys of Consumers Director Joanne Hsu said.

Further breakdown reveals an increase in the index for current economic conditions, up from 76.6 to 77.4, above the forecasted 76.9.

Additionally, the index of consumer expectations dip from 68.5 to 67.3, slightly below expectations of 68.1.

There's a glimmer of hope in the inflation outlook. Year-ahead consumer inflation expectations decreased from 3.4% to 3.3%, signaling a continued softening in short-term inflation concerns among U.S. consumers. Long-term inflation expectations, however, remained stable at 2.9%.