An article summarized by Quartz:
U.S. consumer sentiment fell 7.6% in August to 51.0, down from 55.2 in July and ending two consecutive months of improvement. The decline was worse than economists expected and reflected growing concerns about inflation tied to the Middle East conflict. Consumers became significantly more pessimistic about future business conditions, with expectations falling 11% for the next year and 17% for the longer term.
Inflation expectations also increased, with consumers now expecting 4.3% inflation over the next year, up from 4.2% in July and well above the 3.4% reading recorded before the Iran conflict. Only 8% of consumers expect their incomes to grow faster than inflation, down sharply from 18% in December 2024. The decline in sentiment was broad-based, with particularly large drops among Republicans, older Americans, lower-income households and people without college degrees.
The latest reading highlights the continued volatility in consumer confidence following disruptions to oil markets and rising gasoline prices. Sentiment hit a record low of 44.8 in May, rebounded in June and July as gas prices eased, and then reversed course in August. The survey was conducted from July 28 through August 10, when the national average gasoline price remained above $4 per gallon, with the University of Michigan scheduled to release its final August reading on August 28.
