August 30, 2023
Consumer sentiment holds as personal finances remain stable
Consumer sentiment was relatively unchanged in August and ended the month with its second-highest reading in 21 months, according to the University of Michigan Surveys of Consumers.
This follows two months of large jumps in sentiment resulting from the substantial slowdown in inflation and ongoing strength in labor markets. Overall, consumers remain supported by strong income expectations, but they perceive few meaningful improvements in August relative to July, says U-M economist Joanne Hsu, director of the Surveys of Consumers. Hsu said:
“This month’s reading reflects divergent views of consumers, with some emphasizing the stark improvement over last summer’s excessively high inflation and others focusing on the lack of notable changes in economic conditions this month. With strong income expectations, consumers may be hopeful that the economy will be on an upswing again, but for the moment they are reserving judgment.”