The University of Michigan Consumer Sentiment Index rose slightly month over month from a preliminary August reading of 72.8 to August’s final level of 74.1. Economists polled by Bloomberg were expecting a final August reading of 72.5. The final index reading in August of last year was 89.8.

In February, before the COVID-19 pandemic hit the United States, the consumer sentiment index rang in at 101.0.

Month over month, consumer sentiment rose by 1.6 index points. The percentage increase in the month-over-month score was 2.2% and the year-over-year decline was 17.5%.

The consumer expectations subindex increased sequentially by 2.6 points, from 65.9 to 68.5 (up 3.9%), while the current conditions subindex rose from 82.8 to 82.9 (up 0.1%).

Year over year, the current conditions subindex fell by 21.3% and the consumer expectations subindex dropped by 14.3%.

The survey’s chief economist, Richard Curtin, noted that while nine of 10 consumers hold a negative view of the current economy, half of consumers expect the economy to improve over the course of the next year. Even given that level of optimism, however, 62% believe that overall economic conditions will be “unfavorable.”

The small index improvement in August reflected fewer concerns about the year-ahead outlook for the economy, but prospects for an improved economy remained half as favorable as six months ago.

Curtin also commented that recent strong gains in employment “will significantly slow by year-end without some additional fiscal spending programs to diminish hardships faced by unemployed workers, small businesses, as well as support for state and local governments.”

In the preliminary August report published earlier this month, Curtin noted that consumers do not expect sustained growth in the U.S. economy over the next five years.

On Thursday, Federal Reserve Chair Jay Powell announced that the Fed is now willing to let inflation run at more than its previous target of 2%. Essentially the Fed has declared that there can’t be too many jobs in the U.S. economy.

The U.S. Bureau of Economic Analysis (BEA) announced this morning that personal income rose by 0.4% in July, much better than the consensus estimate for a decline of 0.2%. The BEA also reported its inflation index was 1.0% and the core personal consumption expenditures index rose by 1.3% last month.

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