The numbers: A survey of consumer sentiment hung close a two-year high in August, but Americans expressed more worries about the future of the economy.
The final reading of the sentiment survey in August slipped to 69.5 from a preliminary 71.2, the University of Michigan said Friday. The index hit a 22-month high in July.
The consumer-sentiment survey reveals how consumers feel about their own finances as well as the broader economy.
Key details: A gauge that measures what consumers think about the current state of the economy registered 75.7 at the end of August vs. an initial 77.4
A measure that asks about expectations for the next six months dropped to 65.5 from an initial 67.3 in early August and 68.3 in July.
Americans think inflation will average 3.5% in the next year, a few ticks higher compared to several months ago.
The official rate of inflation is 3.2%, using the consumer price index, though other measures suggest prices are rising somewhat faster.
Big picture: Steady economic growth, ultra-low unemployment and slowing inflation have made Americans less worried about a recession.
Yet interest rates are high and likely to remain so through next year as the Federal Reserve aims return the inflation genie to the bottle. Higher borrowing costs are all but certain to depress the economy and perhaps increase unemployment
Looking ahead: “Consumers perceive that the rapid improvements in the economy from the past three months have moderated, particularly with inflation, and they are tentative about the outlook ahead,” said Joanne Hsu, director of the survey.
Market reaction: The Dow Jones Industrial Average
DJIA,
and S&P 500
SPX,
rose in Friday trades.
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