U.S. consumer sentiment slips slightly in
August
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[August 26, 2023]
By Safiyah Riddle
(Reuters) -U.S. consumer sentiment fell modestly in August, as short and
long term inflation expectations worsened, a survey showed on Friday.
The University of Michigan's final August reading on the overall index
of consumer sentiment came in at 69.5 on Friday compared to 71.6 in
July, and 1.7 percentage points lower than a preliminary reading earlier
in the month. Economists polled by Reuters had forecast sentiment would
remain relatively stable at 71.2. |
A woman carries Nike shopping bags at the
Citadel Outlet mall, as the global outbreak of the coronavirus disease
(COVID-19) continues, in Commerce, California, U.S., December 3, 2020.
REUTERS/Lucy Nicholson/File Photo |
August had the second highest reading since December 2021, and
was far closer to the historic average of 86 than the all-time
low registered in June 2022. The relatively positive outlook was
buoyed by robust consumer spending and a resilient labor market.
But these recent positive trends in outlook might not last:
Americans expressed concerns that recent rapid improvements in
inflation could be moderating, and the overall consumer
expectation index declined by 2.8 percentage points between July
and August, the biggest drop since May.
"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," Joanne Hsu, the director of the University of
Michigan's Surveys of Consumers, said in a statement.
The survey's reading of one-year inflation expectations rose to
3.5% this month from 3.4% in July. The five-year inflation
outlook came in at 3.0% for the third straight month, worsening
since preliminary readings but still within the narrow 2.9%-3.1%
range for 24 of the last 25 months.
"Sentiment is likely to fall further in the months ahead... as
the labor market softens, consumers dip further into excess
savings, and the economy enters a period of slower growth," said
Oxford Economics economist Matthew Martin.
(Reporting by Safiyah Riddle; Editing by Chizu Nomiyama)
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