The US consumer sentiment weakened materially in August from July as consumers worried about rising living costs due to the conflict in the Middle East, a survey showed Friday.
According to a preliminary reading released by the University of Michigan (UM) Surveys of Consumers, the Index of Consumer Sentiment fell to 51 in August from the final reading of 55.2 in July, ending two consecutive months of improvement and coming in below the consensus outlook of 54.2.
In May, the index fell to a record low of 44.8 due to the Middle East conflict.
The survey also showed that the Current Economic Conditions Index fell to 51.8 in August, down from 54.8 in July and 61.7 a year earlier.
Meanwhile, the Index of Consumer Expectations also weakened this month, standing at 50.6, compared with 55.4 in July and 55.9 in August 2025.
Consumers’ expectations for inflation over the next year rose to 4.3 per cent in August from 4.2 per cent in July, while the long-run inflation expectations remained unchanged at 3.3 per cent, the survey reported.
The survey also found that the early-month decline in consumer sentiment was widespread across demographic groups, with particularly sharp drops among older consumers, lower-income consumers and those without a college degree.
“These groups are all particularly vulnerable to any erosion of purchasing power stemming from inflation,” said UM economist Joanne Hsu, director of the surveys.
A separate report from the U.S. Census Bureau on Friday showed that U.S. retail sales posted their first month-on-month decline in nine months.
The report showed that retail sales fell 0.6 per cent in July from the previous month, compared with a 0.2-per cent increase in June, marking the steepest decline since May 2025. Those figures are adjusted for seasonal swings but not inflation.
Sales at nonstore retailers fell 2.2 per cent, while receipts at motor vehicle and parts dealers dropped 1.8 per cent, according to the bureau. Meanwhile, sales at electronics and appliance stores declined 0.5 per cent, while receipts at service stations fell 0.9 per cent, in spite of lower gasoline prices in the period.
COURTESY: Xinhua
