After two solid months of improving mood among U.S. consumers, sentiment unexpectedly cooled in August as concerns over inflation reemerged and weighed heavily on household confidence.
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The University of Michigan’s Consumer Sentiment Index fell to 58.6 in August, down from 61.7 in July and missing expectations of a rise to 62. This marked the first decline in four months, dropping the index to its lowest level since May.
The drop was primarily driven by a sharp decline in how Americans feel about their current financial situation. The Current Conditions subindex slid to 60.9 from 68, significantly below forecasts of 67.9. Meanwhile, the Expectations subindex remained more stable, dipping slightly from 52.7 to 52.2, yet still came in above the expected 56.5.
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