Consumer sentiment in US rebounds last month following 4-months decline

(MENAFN) In August, U.S. consumer sentiment experienced a notable rebound after declining for four consecutive months, according to the final results of the University of Michigan's consumer survey released on Friday. The index of consumer sentiment rose by 1.5 points to 67.9 in August, up from 66.4 in July. This increase was slightly above the market expectation, which had predicted the index would reach 67.8. The improvement marks a positive shift in consumer outlook after a period of declining confidence.

Surveys of Consumers Director Joanne Hsu highlighted that both short-term and long-term economic outlooks among consumers showed improvement, reaching their most favorable levels since April 2024. Notably, long-term economic expectations saw a significant 10 percent increase across various age and income groups, indicating a broader optimism about the future. This positive shift in sentiment reflects a growing confidence in economic conditions over the coming months.

Hsu noted a marked divergence in sentiment between political affiliations during this period. Specifically, Democrats saw a substantial 10 percent increase in their sentiment, while Republicans experienced an equivalent decline. This shift is largely attributed to changing election expectations, particularly with Kamala Harris emerging as the Democratic candidate for president. In July, consumer expectations were heavily tilted toward a Trump victory, with 51 percent of consumers forecasting his win compared to 37 percent for Biden.

However, by August, this outlook had shifted significantly. Only 36 percent of consumers now expected Trump to win, while 54 percent anticipated a victory for Harris. This dramatic change in election expectations has contributed to the observed shifts in consumer sentiment, reflecting how political developments can influence public confidence and economic outlook.

MENAFN01092024000045015839ID1108623594