Consumer confidence in the US fell for the first time in three months in August, and concerns about inflation still persist

The Zhitong Finance App learned that consumer confidence in the US declined for the first time in three months in August, and the worsening economic outlook put pressure on household sentiment. Consumer expectations for inflation in the coming year have declined somewhat, but they are still at historically high levels, indicating that high prices continue to affect Americans' views on the economy. Consumer confidence fell to 51.7 in August, according to data released by the University of Michigan on Friday. The final data was a slight improvement from the previously published initial value, and at the same time higher than the median expectations of economists surveyed by the media.

In terms of inflation expectations, consumers expect prices to rise at an annual rate of 4% over the next year, the lowest level since March this year. However, judging from historical standards, this level is still too high.

Joanne Hsu, head of consumer research at the University of Michigan, said in a statement that consumers are still worried that “inflation will remain high for the foreseeable future.” She pointed out that in addition to issues that have affected consumers' economic views over a long period of time, such as prices and household financial conditions, people are increasingly worried, and prospects in other areas of the US economy may also be weakening.

According to the survey, consumers' views on the economic outlook for the next year and the next five years worsened in August. The indicators for measuring the current state of the economy and consumer expectations were also lower than in July. Among them, consumer confidence among supporters of the Republican Party fell to its lowest level since November 2024.

The decline in consumer confidence shows that as the Middle East conflict continues, the high cost of living is still putting pressure on American households. During August, the national average gasoline price remained above $4 per gallon, while broader inflationary pressure continued to erode residents' real incomes.

Hsu said consumers expect gasoline prices at gas stations to rise further in the future.

Looking at long-term inflation expectations, consumers expect prices to rise by an average of 3.3% per year over the next 5 to 10 years, indicating that although short-term inflation expectations have cooled, public concerns about maintaining high levels of inflation for a long time have not subsided.

The University of Michigan Consumer Survey covers feedback collected from respondents from July 28 to August 24.

Overall, the August data showed a complicated sign that short-term inflation expectations have improved, but consumer concerns about economic growth, household finances, and the longer-term economic outlook are deepening. Against the backdrop of high oil prices and continued pressure on overall prices, consumer confidence has weakened again, adding new uncertainty to the future consumer spending and economic growth prospects of the US.