August Consumer Sentiment Falls Amid Inflation Worries
Consumer sentiment, also known as consumer confidence, measures how U.S. consumers feel about the economy, wages, jobs and their personal finances.

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Updated on Aug. 29.
University of Michigan: Index declines after months of gains
The University of Michigan’s Index of Consumer Sentiment fell in August for the first time in four months, largely due to concerns about inflation, according to the final report for the month released on Aug. 29.
Joanna Hsu, who directs consumer surveys at the University of Michigan, said in the survey release that sentiment is 11% above readings from April and May, but is still at least 10% below readings six and 12 months ago.
Consumers are concerned about high prices, which influenced their perception of buying conditions for durable goods — now at their lowest reading in a year — and of current personal finances, which declined by 7%. However, consumer expectations for their future personal finances remained unchanged from the previous month.
More findings from the University of Michigan
The University of Michigan Index of Consumer Sentiment’s final reading for August registered at 58.2, compared to July’s reading of 61.7. August’s decline is the first decrease in four months, according to the final survey released on Aug. 29.
The university’s Index of Current Economic Conditions fell to 61.7 in August, compared to 68 in July, while the Index of Consumer Expectations went down to 55.9 in August, compared to 57.7 in July. The Consumer Sentiment Index is now 5.9 points higher than its all-time historic low of 50 in June 2022.
Conference Board: Confidence dips slightly
The Conference Board’s preliminary Consumer Confidence Index report for August (released Aug. 26) fell by 1.3 points from July’s revised figure of 98.7. The Present Situation Index and the Expectations Index also declined.
“Consumer confidence dipped slightly in August but remained at a level similar to those of the past three months,” said Stephanie Guichard, a senior economist at The Conference Board, in a press release.
Some key takeaways from the report:
Job, inflation concerns continue. “Pessimism about future job availability inched up and optimism about future income faded slightly,” Guichard said, noting that consumer sentiment about current job availability has now fallen for eight straight months. She added: “Consumers’ write-in responses showed that references to tariffs increased somewhat and continued to be associated with concerns about higher prices.”
Expectations Index still low. The Expectations Index, based on consumers’ short-term expectations for income, business and the job market, declined by 1.2 points from July’s revised level. At 74.8, it remained below 80 for the sixth consecutive month. Figures below that threshold can signal a coming recession.
More findings from the Conference Board
The Conference Board’s Consumer Confidence Index fell 1.3 points in August’s preliminary report to 97.4, the latest report released on Aug. 26 shows.
The board’s Present Situation Index — measuring consumers’ current assessment of business and labor market conditions — went down 1.6 points to 131.2.
The Expectations Index — measuring consumers’ short-term outlook for income, business and labor market conditions — declined 1.2 points to 74.8. The same index was at 54.4 in April, the lowest level in nearly 14 years.
More findings from the Conference Board
The Conference Board’s Consumer Confidence Index fell 1.3 points in August’s preliminary report to 97.4, the latest report released on Aug. 26 shows.
The board’s Present Situation Index — measuring consumers’ current assessment of business and labor market conditions — went down 1.6 points to 131.2.
The Expectations Index — measuring consumers’ short-term outlook for income, business and labor market conditions — declined 1.2 points to 74.8. The same index was at 54.4 in April, the lowest level in nearly 14 years.
New York Fed: Consumers concerned about prices, but overall outlook improves
The New York Fed’s Survey of Consumer Expectations for July, released on Aug. 8, shows inflation expectations rose, but households felt more positive about their finances.
- Inflation: Median inflation expectations for the next year increased to 3.1% in July from 3% in June. The expectation that inflation would increase over the next three years was unchanged at 3%. Finally, expectations for inflation rising in the next five years increased to 2.9% from 2.6% in June.
- Job security: The likelihood of the unemployment rate rising in the next year fell by 2.3 percentage points to 37.4% — the lowest since January. But Americans also said the chance of losing their job rose slightly from 14% to 14.4%.
- Personal finance: Fewer Americans say their finances are worse off than a year ago or expect to be worse off a year from now, compared to last month.
What is consumer sentiment?
Consumer sentiment, also known as consumer confidence, is an index of how U.S. consumers are feeling about the current and future state of the economy, and all that folds into the economy: the job market, wages, business conditions and their personal finances. It’s a valuable tool for economists, as consumer sentiment can be used as an early predictor of economic changes.
How people feel about the economy can directly impact the economy, because consumers' attitudes often affect how much they spend on things like food, transportation, household goods, entertainment and more.
In 2023, consumers’ personal spending made up 67.9% of the U.S. GDP, or gross domestic product, according to the Federal Reserve Bank of St. Louis. That’s a significant majority of the nation’s GDP, so keeping a close eye on consumer sentiment is key in foreseeing potential economic slumps or rallies.
When the economy is in a recession, consumer sentiment falls. On the flip side, when the economy is expanding, consumer sentiment rises. The index does typically peak before a recession, though.
Unlike other indexes, such as the Consumer Price Index (CPI), consumer sentiment isn’t calculated using spending data or hard figures. Instead, economists rely on two major surveys of consumer confidence: The University of Michigan’s Surveys of Consumers and the Conference Board’s Consumer Confidence Survey.
Each survey collects the general attitudes and opinions of hundreds of U.S. consumers. Then, those opinions are assigned numeric values and aggregated into one number, or index.
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What is consumer sentiment like right now?
The University of Michigan’s Index of Consumer Sentiment
The final reading for August from the University of Michigan released on Aug. 29 shows:
- The Index of Consumer Sentiment registered at 58.2 for August, down from 61.7 for July.
- Current Economic Conditions registered at 61.7 for August, down from 68 for July.
- The Index of Consumer Expectations registered at 55.9 for August, compared to 57.7 for July.
How the University of Michigan creates its index
The Index of Consumer Sentiment is one of three indexes derived from the University of Michigan’s Surveys of Consumers, which started in 1946. Originally conducted annually, the surveys switched to a monthly cadence in 1978. The surveys have a sample size of roughly 600 people selected randomly from the 48 adjoining U.S. states and the District of Columbia.
The surveys include roughly 50 questions covering personal finances, business conditions and buying conditions. From those surveyed, three indexes are produced: the Index of Consumer Sentiment, the Index of Consumer Expectations and the Index of Current Economic Conditions.
The Index of Consumer Sentiment is the most commonly cited index of the bunch. It’s derived from these five questions:
- "We are interested in how people are getting along financially these days. Would you say that you (and your family living there) are better off or worse off financially than you were a year ago?"
- "Now, looking ahead: Do you think that a year from now you (and your family living there) will be better off financially, or worse off, or just about the same as now?"
- "Now, turning to business conditions in the country as a whole. Do you think that during the next twelve months we'll have good times financially, or bad times, or what?"
- "Looking ahead, which would you say is more likely: that in the country as a whole we'll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?"
- "About the big things people buy for their homes, such as furniture, a refrigerator, stove, television, and things like that. Generally speaking, do you think now is a good or bad time for people to buy major household items?"
Historically, the surveys have been conducted by phone. Starting in July 2024, they'll be conducted online, with researchers aiming for 900 to 1,000 respondents.
The Conference Board’s Consumer Confidence Index
Conference Board preliminary data for August, released on Aug. 26, shows:
- The Conference Board’s Consumer Confidence Index fell slightly (97.4) compared to July (98.7).
- The Present Situation Index registered at 131.2, compared to 132.8 in July.
- The Expectations Index decreased 1.2 points to 74.8 in August.
The report notes that consumers’ average 12-month inflation expectations rose in August to 6.2% after declining for the past three months.
How the Conference Board’s Consumer Confidence Index comes together
The Conference Board’s Consumer Confidence Survey was launched in 1967 as a mail survey conducted every other month. Today, the survey is conducted online, on a monthly basis, with a sample size of roughly 3,000 respondents.
The Conference Board issues a five-question survey to calculate three distinct indexes: the Consumer Confidence Index, the Present Situation Index and the Expectations Index. Once the surveys have been completed, each question is given a relative value. Then, those values are compared against their relative values from 1985 — the survey’s benchmark year, with an index set at 100.
The Consumer Confidence Index is the average index for all five questions. The Present Situation Index is calculated using the average indexes for the first two questions, and the remaining three questions determine the Expectations Index.
Present Situation Index
- Respondents’ appraisal of current business conditions.
- Respondents’ appraisal of current employment conditions.
Expectations Index
- Respondents’ expectations regarding business conditions six months hence.
- Respondents’ expectations regarding employment conditions six months hence.
- Respondents’ expectations regarding their total family income six months hence.
Consumer Confidence Index
This is the average index for all five questions above.
The Federal Reserve Bank of New York’s Survey of Consumer Expectations
The highlights for July from the Federal Reserve Bank of New York’s Survey of Consumer Expectations released on Aug. 7 shows:
- Inflation. Median inflation expectations increased by 0.1 percentage point to 3.1% for the one-year ahead horizon, held steady at the three-year horizon (3%) and increased 0.3 percentage point to 2.9% at the five-year horizon.
- Commodity prices. Year-ahead price expectations decreased for multiple categories including gas (down 0.3 percentage point to 3.9%); medical care (down 0.1 percentage point to 9.2%); cost of college (down 0.4 percentage point to 8.7%) and rent (down 2.1 percentage points to 7%). Expectations for food prices over the next year were unchanged (5.5%) compared to the previous month.
- Home price growth. Median year-ahead home price growth expectations held steady at 3%. Since August 2023, the range has moved between 3% and 3.3%.
- Earnings expectations. Median one-year-ahead expectations for earnings growth went up by 0.1 percentage point to 2.6%, slightly below the 12-month average of 2.8%.
- Unemployment expectations. The mean probability that the unemployment rate will increase a year from now decreased by 2.3 percentage points to 37.4% — the lowest reading since January.
- Probability of job loss. The mean expectation of job loss over the next 12 months went up by 0.4 percentage point to 14.4% — higher than the trailing 12-month average of 13.9%.
- Probability of quitting. The mean expectation of quitting a job over the next 12 months went up by 0.2 percentage point to 19%.
- Probability of finding a job if job loss occurs. The mean perceived probability of finding a job over the next 12 months increased by 1.1 percentage points to 50.7%.
- Household income growth. The median expectation of household income growth held steady at 2.9%.
- Household spending growth. Households expect to spend 4.9% more over the next year, a 0.1 percentage point increase.
- Credit access. Fewer households reported that it is easier to get credit now compared to a year ago. But more Americans said they expect getting credit will be easier in the next year.
How the Federal Reserve Bank of New York conducts its survey
The Federal Reserve Bank of New York’s Survey of Consumer Expectations focuses on expectations about economic outcomes.
The survey, which is conducted by NielsenIQ, launched in 2013. It’s an internet-based survey that asks a rotating panel of 1,300 heads-of-household about their expectations of the economy, as well as their own personal finances related to the following categories:
Inflation:
- Inflation expectations.
- Inflation uncertainty.
- Probability of different inflation outcomes.
- Home price change expectations.
- Home price change uncertainty.
- Commodity price change expectations.
Labor market:
- Earnings growth expectations.
- Earnings growth uncertainty.
- Job separation expectations.
- Job finding expectations.
- Moving expectations.
- Expectations of higher unemployment.
Household finance:
- Household income growth expectations. Household spending growth expectations. Change in taxes. Change in credit availability. Debt delinquency expectations. Expectations of higher interest rate on savings accounts. Household financial situation.Expectations of higher stock prices. Government debt growth expectations.
When do the next consumer sentiment reports come out?
The University of Michigan’s next set of results for its Surveys of Consumers will be released on Friday, Sept. 12.
The Conference Board will release its next Consumer Confidence Survey on Tuesday, Aug. 26.
The New York Fed will release its next Survey of Consumer Expectations on Sept. 8.
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