Consumer sentiment has remained fairly steady thus far in August, inching up 2.1% compared to the previous month and down 2.3% compared to August 2023.
This is the fourth consecutive month in which sentiment remained about the same, according to preliminary results from the University of Michigan Surveys of Consumers.
Consumers’ five-year economic outlook, on the other hand, rose to its highest level in five months, per a Friday (Aug. 16) press release.
These readings are consistent with the fact that, in a presidential election year, election developments generally don’t alter consumers’ assessments of the current situation but can influence their expectations for the future, Joanne Hsu, director of the Surveys of Consumers, said in the release.
“Survey responses generally incorporate who, at the moment, consumers expect the next president will be,” Hsu said. “Some consumers note that if their election expectations do not come to pass, their expected trajectory of the economy would be entirely different.”
Bloomberg reported Friday that the rise in the consumer sentiment index from 66.4 in July to 67.8 exceeded the median forecast of economists it surveyed, which was 66.9.
The media outlet attributed this greater-than-expected rise to consumers feeling more optimistic as inflation steadied and to Democrats feeling more confident after Vice President Kamala Harris replaced President Joe Biden as the party’s nominee.
The Surveys of Consumers’ preliminary results also found that consumers’ year-ahead inflation expectations remained unchanged at 2.9%, a figure that was the same as the previous month and within the range of 2.3% to 3.0% that was seen in the two years prior to the pandemic, according to the press release.
Their long-run inflation expectations were gauged at 3.0%, which was the same as the previous five months and slightly elevated in comparison to the 2.2% to 2.6% range recorded during the two years before the pandemic.
Inflation is at a multiyear low, according to the U.S. Department of Labor’s Consumer Price Index for July, which was released Wednesday (Aug. 14).
At the same time, it’s uncertain whether the more than 60% of U.S. citizens who live paycheck to paycheck will feel much relief, PYMNTS reported Wednesday. While food inflation is off its peak, it remains a force to be reckoned with.
