US consumer sentiment increases for first time in five months
The sentiment index climbed to 67.8 from 66.4 in July
US CONSUMER sentiment rose in August for the first time in five months on more optimistic expectations about their finances as inflation steadies.
The sentiment index climbed to 67.8 from 66.4 in July, according to the preliminary August reading from the University of Michigan. The median estimate in a Bloomberg survey of economists called for 66.9.
Consumers expect prices will climb at an annual rate of 2.9 per cent over the next year, unchanged from the prior month, data on Friday (Aug 16) showed. They see costs rising 3 per cent over the next five to 10 years.
The rise in sentiment was partially driven by President Joe Biden’s decision not to seek re-election. Confidence rebounded among Democrats after Vice President Kamala Harris stepped in as the party nominee.
“Consumer expectations are subject to change as the presidential campaign comes into greater focus, even as consumers expect that inflation – still their top concern – will continue stabilising,’’ Joanne Hsu, director of the survey, said in a statement.
The survey showed more consumers believe Harris would do a better job on the economy. Before Biden’s decision, Republican nominee Donald Trump had been polling well ahead of him on that issue.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Even with the latest pickup, sentiment remains restrained by a higher cost of living, cooler hiring and elevated borrowing costs. While household demand remains resilient, consumers are increasingly turning to credit cards and resorting to savings to support their spending.
The report showed a measure of buying plans for durable goods slipped to the lowest level since the end of 2022.
Still, labour market expectations remained stable. Just 35 per cent of respondents said they expect the unemployment rate to rise in the coming year. The share of consumers who expect interest rates to decline in the next year rose significantly.
The consumer expectations index rose to a four-month high of 72.1 in August. The current conditions gauge slipped for a fifth month. BLOOMBERG
Share with us your feedback on BT's products and services
