The numbers: A survey of U.S. consumers saw sentiment rise in August, though still mired near an all-time low seen in June.
The University of Michigan’s index of consumer sentiment rose to 55.1 this month from a July reading of 51.1. Economists expected a reading of 52.5, according to a Wall Street Journal poll.
Consumer expectations for inflation over the next year ticked down to 5% from 5.2% last month, while expectations for inflation over the next five years ticked up to 3% from 2.9% in July, which was a six-month low.
Big picture: Americans remain concerned about the rapidly rising costs of of key goods like food and rent, though declines in the price of gasoline in recent weeks has helped buoy the national mood.
“All components of the expectations index improved this month, particularly among low and middle-income consumers for whom inflation is particularly salient,” wrote Joanne Hsu, director of the survey.
Overall price inflation stayed flat in the month of July, according to the consumer price index released by the government on Wednesday, though the cost of a common basket of goods remained 8.5% higher when compared to the same period last year.
Those data showed food costs rising by 1.1% last month, offset by a 4.1% decline in energy prices.
Inflation remains a top concern for Americans, despite the stabilization of overall prices last month, with Hsu noting that 48% of respondents blame inflation for “eroding their living standards.”
The Michigan survey’s inflation expectations data is watched by Federal Reserve policymakers as they decide how quickly to raise interest rates in the coming months.
In June, Federal Reserve Chairman Jerome Powell told reporters that a sharp rise in inflation expectations “were quite eye catching” and “something we need to take seriously.”
Key details: A gauge of consumer’s views of current conditions fell to 55.5 in August from 58.1 in July, while an indicator of expectations for the next six months rose to 54.9 in August from 47.3 last month.
Market reaction: U.S. stocks were on the rise early Friday, with both the Dow Jones Industrial Average
DJIA,
and the S&P 500
SPX,
posting gains.
