Preliminary data released by the University of Michigan on Friday indicates a greater-than-anticipated improvement in U.S. consumer sentiment for August.
The University reported that its consumer sentiment index increased to 67.8 in August, up from 66.4 in July. This exceeded economists' expectations, who had forecasted a slight rise to 66.9.
The sentiment index recovered after reaching its lowest point since November 2023 the previous month.
"This month’s election developments have heavily influenced sentiment, with a 6% rise among Democrats following Harris's replacement of Biden as the Democratic presidential nominee," stated Joanne Hsu, Director of Surveys of Consumers.
"Conversely, Republican sentiment declined by 5% this month," she added. "Independent voters, who remain neutral, saw a sentiment increase of 3%."
The report also highlighted that the index of consumer expectations rose to 72.1 in August from 68.8 in July, while the index of current economic conditions dropped to 60.9 from 62.7 in the same period.
"Overall, we noticed an enhancement in expectations for both personal finances and the five-year economic outlook, reaching its highest level in four months. This trend aligns with the notion that election developments can shape future expectations but are unlikely to affect current assessments," commented Hsu.
Regarding inflation, the report noted that both year-ahead and long-term inflation expectations remained stable from the previous month, at 2.9 percent and 3.0 percent, respectively.
