US consumer sentiment largely unchanged in August

Consumer sentiment in the U.S. remained almost flat in August, according to a University of Michigan survey released Friday.

The final reading of the index of consumer sentiment stood at 72.8 in August, up from July's 72.5. Economists surveyed by The Wall Street Journal had expected the indicator to be at 71.0.

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Two significant changes since April have been that consumers have become more pessimistic about the five-year economic outlook and more optimistic about buying conditions.

"Lower interest rates by the Fed prompted more favorable buying, especially for homes, and the D.C. policy gridlock was responsible for the weaker outlook," Richard Curtin, the survey's chief economist, said. "The overall confidence in economic policies fell to the lowest level since [President] Trump first entered office."

Consumers' assessment of the current economic conditions fell to 82.5 in August from 82.8 in July.

The index of consumer expectations--which reflects the balance of respondents anticipating improved business conditions in the next six months--rose to 66.5 in August from July's 65.9.

The data, compiled after a minimum of 500 interviews, covers three broad areas of consumer sentiment: personal finances, business conditions and buying conditions.

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"Bad economic times are anticipated to persist not only during the year ahead, but the majority of consumers expect no return to a period of uninterrupted growth over the next five years," Mr. Curtin said.

Consumers anticipate declines in the national unemployment rate to significantly slow and expect a rising rate of inflation during the year ahead. While a positive growth rate in consumption is anticipated in the second half of the year, it will hardly herald the end of the coronavirus recession, Mr. Curtin said.