The University of Michigan's preliminary Consumer Sentiment Index fell to 51.0 in August, down 7.6 percent from July's final reading of 55.2 and the first decline after two consecutive months of improvement. Economists surveyed by Reuters had forecast 54.5, while a Bloomberg survey pointed to 55.
The Index of Consumer Expectations dropped to 50.6 from 55.4, while the Current Economic Conditions Index fell to 51.8 from 54.8. According to the survey, expected business conditions sank 11 percent for the short run and 17 percent for the long run.
Year-ahead inflation expectations rose to 4.3 percent from 4.2 percent in July, topping the 3.4 percent reading recorded in February, just before the Iran conflict erupted, and coming in above every 2024 reading. Consumers' five-to-ten-year inflation outlook remained anchored at 3.3 percent, unchanged for the third consecutive month. Only 8 percent of consumers expect their income growth to outpace inflation in the year ahead, down from 18 percent in December 2024.
Joanne Hsu, director of the University of Michigan Surveys of Consumers, said sentiment fell across the political spectrum, with Republicans recording the steepest month-to-month decline. "Sentiment among Republicans is now 19 percent below readings just prior to the Iran conflict and the lowest since the 2024 election," Hsu said in a statement. Notably large declines were also recorded among older consumers, lower-income consumers and those without a college degree.
The August data extends a turbulent stretch for consumer confidence that began when conflict in the Middle East disrupted oil markets and drove up gasoline prices. Sentiment rebounded in June from a record low set in May, when the index fell to 44.8 amid surging pump prices.
Gold reacted to the release: spot gold last traded at 4,389.03 dollars per ounce, up 0.87 percent on the day, as it attempted to reclaim the 4,400-dollar level after the data, according to Kitco News.
Sources
- [Quartz – US consumer sentiment sliding again, Middle East conflict pushes up cost of living](https://qz.com/us-consumer-sentiment-august-2026-iran-inflation-081426)
- [Wall Street Times – University of Michigan Consumer Sentiment Drops to 51 in August](https://wallstreettimes.com/university-of-michigan-consumer-sentiment-drops-to-51-in-august-as-inflation-expectations-rise-and-business-outlook-deteriorates/)
- [Kitco News – Spot gold nears $4,400/oz after preliminary Consumer Sentiment falls to 51](https://www.kitco.com/news/article/2026-08-14/spot-gold-nears-4400oz-after-preliminary-consumer-sentiment-falls-51-one)
