By Alice Seeley
U.S. consumer sentiment rose to a three-month high in early August, according to the University of Michigan. The university’s consumer sentiment index jumped to 55.1 this month, which is up 3.6 from July’s index reading of 51.5.
Just two months earlier, consumer sentiment reached a record low of 50. This increase surprised economists, who predicted a reading of 52.5.
Consumer sentiment is still 21% lower than in August 2021, when the reading sat at 70.3. This month the university’s gauge of current economic conditions fell unexpectedly to 55.5 from 58.1 in late July, while consumer expectations rose by 16.1% to 54.9 from its July reading of 47.3. This is the largest jump in 13 years.
“All components of the expectations index improved this month, particularly among low- and middle-income consumers for whom inflation is particularly salient,” said the university’s survey director, Joanne Hsu.
This month’s index results show that consumers are still struggling with inflation.
“Uncertainty over long-run inflation receded a bit,” Hsu said. “Still, the share of consumers blaming inflation for eroding their living standards remained near 48%.”
