Consumer confidence slipped in August as Americans grew more uneasy about inflation, according to new data from the University of Michigan.
The university’s Consumer Sentiment Index fell 5% from July, dropping to 58.6 in preliminary August results. That marks a 13.7% decline compared with the same month last year. Survey director Joanne Hsu said the downturn was largely driven by rising inflation worries.
The index measuring current economic conditions fell 10.4% month over month to 60.9, while the expectations index dipped 0.9% to 57.2, down more than 20% from a year earlier.
Inflation expectations also shifted higher. Consumers now expect prices to rise 4.9% over the next year, up from 4.5% in July. Long-term inflation expectations rose to 3.9% from 3.4% last month.
“This month ended two consecutive months of receding inflation for short-run expectations and three straight months for long-run expectations,” Hsu said.
Other measures reflected weaker confidence as well. Buying conditions for durable goods fell 14%, reaching their lowest level in a year, as high prices weighed on consumers. Assessments of current personal finances slipped, though expectations for future finances ticked up slightly amid modest gains in income outlooks.
“Overall, consumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused,” Hsu said. “However, consumers continue to expect both inflation and unemployment to deteriorate in the future.”
