Survey Shows Consumer Sentiment Improvement in August

United States consumers feel better about the economy than they did a month ago, preliminary August data from the closely watched University of Michigan survey of consumer sentiment indicated.

The preliminary monthly figure for the index came in for August at 55.1, an announcement from the university’s survey center stated. The figure represents an increase of 7% over July’s 51.5.

“Consumer sentiment moved up very slightly this month to about 5 index points above the all-time low reached in June,” Survey Director Joanne Hsu said in the announcement. “All components of the expectations index improved this month, particularly among low- and middle-income consumers for whom inflation is particularly salient.”

“At the same time,” she added in the announcement, “high income consumers, who generate a disproportionate share of spending, registered large declines in both their current personal finances as well as buying conditions for durables.”

Economists define durables, or durable goods, as items that do not have to be replaced often.

Year over year, the preliminary August figure is down 21.6%, according to the announcement.

The survey’s authors attributed the improving sentiment in part to declining energy prices. Consistent with July, about 48% of survey respondents said inflation has eroded their standards of living.

Broken down by self-identified political affiliation: the sentiment expressed by Democrats was 68.6, up from 65.9 in July but down from 92.4 in August 2021. Republicans’ sentiment came in at 38.1, up from 34.3 in July and down from 50.3 in August 2021. Independents came in at 57.7, up from 53 in July and down from 66.3 in August 2021.

When consumer sentiment plunged in June, experts attributed the attitudes to a surge in gasoline prices.

The national average price for a gallon of gas Friday (Aug. 12) was $3.98, as calculated by AAA. In June, AAA reported a then-record national price per gallon of $5.01.