Consumer sentiment soured in August for the first time in four months as Americans grew antsy about where inflation is headed.<\/p>\n
The latest University of Michigan consumer survey<\/a> released Friday showed year-ahead inflation expectations soared to 4.9% in August from 4.5% in July. That pessimism was seen across demographic groups and political affiliations. Overall, sentiment dropped 5% month over month, the survey showed.<\/p>\n On an annual basis, inflation has held at 3% or lower so far this year<\/a>, though core inflation stripping out more volatile food and energy prices rose 0.3% between June and July<\/a>, the largest gain in six months. Hotter-than-expected wholesale inflation data released this week<\/a> suggested consumers may face more pricing pressure in the months to come.<\/p>\n Learn more: July CPI breakdown: Consumers are feeling the crunch of accelerating inflation<\/a><\/p>\n Still, \u201cconsumers are no longer bracing for the worst-case scenario for the economy feared in April when reciprocal tariffs were announced and then paused,\u201d said Joanne Hsu, the survey director, in a statement. (High country-specific tariffs took effect last week.)<\/p>\n Consumers in the survey also expect the job market to weaken, following what is now a three-month streak of disappointing jobs numbers. Though the unemployment rate<\/a> has been hovering between 4% and 4.2% since May 2024, the US economy added 73,000 nonfarm payrolls in July, less than the 104,000 expected by economists. Meanwhile, May and June jobs figures were revised sharply downward<\/a> to a total gain of just 33,000 jobs.<\/p>\n \u201cThe share of consumers expecting unemployment to worsen in the year ahead was about 32% in 2022 and as recently as November 2024, but is now about 60%, a reading last seen in the Great Recession,\u201d Hsu wrote in a report <\/a>that was also released Friday.<\/p>\n But tariff worries and recession talks aside, consumers are still getting out their credit cards: Retail sales in July<\/a> were up 0.5% from the month prior.<\/p>\n Read more: What is inflation, and how does it affect you? <\/a><\/p>\n