FX.co ★ US Consumer Sentiment Weakens Despite Upward Revision

The University of Michigan’s consumer sentiment index was revised up to 51.7 in August 2026, from a preliminary estimate of 51.0. Despite this upward revision, sentiment declined about 6% from July and remained roughly 11% below its level a year earlier, underscoring persistent worries that inflation will stay elevated for the foreseeable future. Sentiment weakened across all political affiliations, with the steepest decline among Republicans. Older consumers, lower- and middle-income households, and those without stock market investments also reported particularly sharp deteriorations. Continued policy uncertainty—especially surrounding the Iran conflict—has further stoked expectations of additional increases in gasoline prices. Concerns about softening economic conditions are mounting, with one-year business expectations down 10% and the five-year outlook lower by 13%. At the same time, one-year inflation expectations eased to 4.0% from 4.2%, while long-run expectations were unchanged at 3.3% for the third consecutive month.