Consumer sentiment fell 2.9% in August, while still maintaining the second-highest reading in 21 months, according to data from the University of Michigan.
“After rising sharply for the past several months, consumer sentiment moved sideways in August with a small decline that is not statistically different from July,” said Joanne Hsu, director of the Surveys of Consumers.
August’s consumer sentiment reading came in at 69.5, lower than July’s reading of 71.6, but still 19.4% higher year-over-year—and 39% above the all-time historic low reached in June 2022.
While inflation expectations for the future, meaning the year ahead, increased slightly to 3.5%, they remain above the 2.3% – 3% range seen in the two years prior to the pandemic. Long-run inflation expectations remained unchanged at 3% for the third month, again staying within the 2.9% – 3.1% range for the 24th month.
“While buying conditions for durables, and expectations over living conditions both improved, the long-run economic outlook fell back about 12% this month, but remains higher than just two months ago,” added Hsu. “Consumers weighed a combination of positive and negative factors in the economy, which led to differing offsetting trends across demographic groups. Consumers perceive that the rapid improvements in the economy from the past three months have moderated, particularly with inflation, and they are tentative about the outlook ahead.”
In a similar vein, RISMedia’s Broker Confidence Index (BCI) also saw a decrease, from 6.7 in June to 6.5 in July. This reading comes in identically to the reading in January. RISMedia Senior Editor Jesse Williams, author of the BCI, attributes this to mortgage rates reaching back up to January numbers and a general unsettled nature across the market.
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