Tariff and inflation concerns persist, U.S. consumer confidence drops to a three-month low
U.S. consumer confidence dropped sharply in August, falling to a three-month low, indicating that uncertainty related to tariffs and concerns about inflation continue to weigh on the economic outlook.
A survey released Friday by the University of Michigan showed that the final consumer confidence index for August fell to 58.2, down from 61.7 in July and also below the preliminary reading of 58.6. The data shows that consumers expect prices to rise at an annual rate of 4.8% over the next year, up from 4.5% last month; inflation expectations for the next 5 to 10 years are at 3.5%. Although this is an improvement from the preliminary reading of 3.9% released earlier this month, it is still slightly higher than July.
The report further pointed out that consumers' anxiety about employment and the business environment has intensified. About 63% of respondents expect the unemployment rate to rise in the coming year, a proportion not only higher than last month but also much higher than the same period last year. The market generally expects that the non-farm payroll report for August, to be released next week, will show that job growth remains moderate. Federal Reserve Governor Waller said on Thursday that he supports a rate cut in September and expects further easing in the next six months to help improve the employment outlook.
Consumers' willingness to purchase big-ticket durable goods and automobiles has significantly deteriorated. Joanne Hsu, director of the University of Michigan's survey project, pointed out: "An increasing number of consumers are mentioning high prices and tax/tariff factors, especially in terms of car-buying conditions, where the impact is particularly pronounced." This suggests that household financial pressures may further affect consumer spending, which is the main driver of U.S. economic growth.
However, another report released by the U.S. government on the same day showed that consumer spending in July posted the largest month-on-month increase in four months, supported by income growth. This data also reflects the impact of price pressures on consumer sentiment. Excluding food and energy, the core PCE price index rose 2.9% year-on-year in July, the highest level since February.
Sub-indices from the University of Michigan showed that the index reflecting future expectations fell to 55.9, a three-month low and below the preliminary reading of 57.2; the indicator measuring current conditions also dropped to 61.7 from last month. The survey was conducted between July 29 and August 25.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Cobie: Long-term trading
Crypto Twitter doesn't want to hear "get rich in ten years" stories. But that might actually be the only truly viable way.

The central bank sets a major tone on stablecoins for the first time—where will the market go from here?
This statement will not directly affect the Hong Kong stablecoin market, but it will have an indirect impact, as mainland institutions will enter the Hong Kong stablecoin market more cautiously and low-key.

Charlie Munger's Final Years: Bold Investments at 99, Supporting Young Neighbors to Build a Real Estate Empire
A few days before his death, Munger asked his family to leave the hospital room so he could make one last call to Buffett. The two legendary partners then bid their final farewell.

Stacks Nakamoto Upgrade
STX has never missed out on market speculation surrounding the BTC ecosystem, but previous hype was more like "castles in the air" without a solid foundation. After the Nakamoto upgrade, Stacks will provide the market with higher expectations through improved performance and sBTC.

