The University of Michigan reported Aug. 26 that its final index of sentiment stood at 89.8 this month compared with 90 in July. The median projection in a Bloomberg survey called for 90.8 after a preliminary reading of 90.4.
The share of households that expected their finances to improve fell to 29%, the smallest since late 2014, as views dimmed among those younger than 45. While long-term inflation expectations dropped to the lowest on record, consumers anticipated smaller income gains.
“Confidence eased back in late August to register a trivial decline from the July reading,” Richard Curtin, director of the Michigan survey, said in a statement. “Less favorable personal financial prospects were largely offset by a slight improvement in the outlook for the overall economy.”
Estimates in the Bloomberg survey of economists for the Michigan index ranged from 90 to 92.3. The Aug. 26 figure compares with an average consumer sentiment reading of 92.9 in 2015 and 91.7 in the first seven months of this year.
The current conditions index, which measures Americans’ perceptions of their finances, dropped to 107 in August from 109 in the prior month.
The gauge of expectations six months from now rose to 78.7 from 77.8 in July.
Respondents expected the inflation rate in the next year will be 2.5%, compared with 2.7% in the July survey. Over the next five to 10 years, they also project a 2.5% rate of price growth, the lowest on record, after 2.6% in the prior month.
Meanwhile, the presidential election continues to be a source of uncertainty for consumers in terms of future economic policies, the report showed.