Key Takeaways<\/p>\n
Inflation worries surged this month for consumers, who are growing more concerned about the state of the economy.\n<\/p>\n
The closely-followed Michigan Consumer Sentiment Index for August fell to 58.6% in its preliminary reading issued today. The decline surprised economists, who expected the index to increase again this month, according to a survey by The Wall Street Journal and Dow Jones Newswire.\n<\/p>\n
It\u2019s the first time in four months<\/a> that sentiment has declined. This comes after consumers\u2019 feelings about the economy rebounded<\/a> last month, when President Donald Trump\u2019s tariffs didn’t appear to do as much damage as expected. However, a weak jobs report and persistently high inflation are dampening the vibe for consumers.\n<\/p>\n \u201cOverall, consumers are no longer bracing for the worst-case scenario for the economy [that was] feared in April when reciprocal tariffs were announced and then paused,\u201d said the survey\u2019s director Joanne Hsu.\u00a0 \u201cHowever, consumers continue to expect both inflation and unemployment to deteriorate in the future.\u201d\n<\/p>\n Inflation Expectations Surge on Renewed Tariff Worries <\/p>\n As several new tariffs take effect<\/a>, consumer inflation worries have shot higher. Expected price increases for the year ahead jumped to 4.9% from 4.5% in July, according to the survey.\n<\/p>\n \u201cThe latest round of tariff announcements jumpstarted inflation concerns for many households that drag on assessments of current economic conditions,\u201d said Nationwide Senior Economist Ben Ayers.\n<\/p>\n Long-run inflation expectations also spiked, indicating that consumers expect price pressures to stick around. Inflation expectations are closely followed by economists<\/a> because they can become self-fulfilling as price hikes and wage hikes rise in a vicious cycle.\n<\/p>\n \u2018Soft\u2019 and \u2018Hard\u2019 Data Remain Out of Step <\/p>\n The \u201csoft\u201d consumer survey data was once again out of line with the \u201chard\u201d economic data in the July retail sales report<\/a>, also released today, that showed consumer spending increased last month. Other recent reports have shown a trend of consumer sentiment moving<\/a> in a different direction than the economic data.\u00a0\n<\/p>\n \u201cRetail spending was solid in August, once again driving a wedge between the hard and soft data,” Ayers said. “But the overarching caution expressed by many respondents in recent months implies a weaker pace of consumer spending over the rest of 2025 as households look to tighten budgets.”<\/p>\n","protected":false},"excerpt":{"rendered":"Key Takeaways Consumers felt worse about the economy in August as a closely-followed survey showed increased worries about…\n","protected":false},"author":2,"featured_media":347709,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[51,1700,16,15],"class_list":{"0":"post-347708","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115035334352070571","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/347708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=347708"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/347708\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/347709"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=347708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=347708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=347708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}