Consumer Sentiment Looking Soft in August

Mid-August expectations fell to 66.2 from the previous 71.8, recording the lowest level since the government shutdown in October. The current conditions were reported at 99.6, an increase of 2.2 points. This current conditions marked a recovery high.

The five-year inflation forecast from respondents increased at a rate of 2.8% despite the declining gas prices. The 12 month inflation forecast was projected at 3.4%.

Stocks have softened mid-morning on Friday since the initial report, but the drop may be tied to Ukraine-Russia tension headlines more than they are tied to the weaker-than-expected sentiment reading.

The University of Michigan Consumer Survey Center surveys 500 households each month for views on their own financial conditions and attitudes about the state of the economy. This report is much narrower compared to the Conference Board’s report on consumer confidence, but it is also released much sooner and is considered a live reading for the current month.