Consumer Sentiment: Edged Lower, Trend Still Higher

Bottom Line: The University of Michigan's consumer sentiment edged slightly lower in the final reading for August. Consumers said current conditions were a touch weaker, and their future expectations were moderately lower. Year-ahead inflation expectations edged up to 3.50%, the first increase in several months, but still trending lower. 5-year inflation expectations were steady at around 3%. Overall, the trend in consumer sentiment remains moderately higher, although the level of sentiment remains historically low. This suggests that consumers will still be spending cautiously amid continued inflation pressures and uncertainty about high interest rates.