UMich: Consumers wrap up the summer on a slightly less dour note

The University of Michigan's (UMich) second and final stab at August consumer sentiment USUMSF=ECI showed the mood among consumers wasn't quite as morose as originally reported.

The index came in at 51.7 vs. the 51.0 analysts expected, and a 51.0 prior reading.

Even so, the mood of the American consumer, burdened with powering about 70% of the U.S. economy, deteriorated by 6.3% from July.

The inflation expectations element showed respondents now expect annual price growth of 4.0% a year from now. That's cooler than UMich's final 4.2% take for July, but 1.5 percentage points hotter than the most recent core CPI reading.

Longer term, consumers expect annual inflation of 3.3% five years from now, unchanged from a month prior.

Survey participants' aggregate assessment of present conditions was revised slightly higher, and near-term expectations were also improved. Yet those two metrics still showed monthly drops of 5.3% and 7.0%, respectively.

"Consumer sentiment confirmed its early month reading, falling about 6% from last month and landing about 11% below a year ago amid continued worries that inflation will remain elevated for the foreseeable future," writes Joanne Hsu, UMich's director of consumer surveys.

"With ongoing policy uncertainty including the Iran conflict, consumers anticipate further increases in gasoline prices both in the short and long run," Hsu adds. "In addition to the pocketbook issues that have been central to consumers’ views of the economy, they are increasingly worried that prospects elsewhere in the economy could be weakening."