Final August consumer sentiment index comes in at 51.7, topping initial estimate

• The preliminary August reading was 51.0
• Consumer sentiment registered 51.7, above the 51.0 estimate. The previous month was 55.2.
• Current conditions came in at 51.9 versus the 51.8 estimate and the preliminary 51.8. Last month was 54.8.
• Expectations hit 51.5, compared with the preliminary 50.6. The prior month stood at 55.4.
• One-year inflation expectations fell to 4.0% from the preliminary 4.3%. The prior month was 4.2%.
• Five-year inflation expectations were unchanged at 3.3%, matching both the preliminary figure and the prior month.

Joanne Hsu provided the following commentary:Consumer sentiment confirmed its early month reading, falling about 6% from last month and landing about 11% below a year ago amid continued worries that inflation will remain elevated for the foreseeable future. Sentiment declines in August were seen for all political groups and were particularly acute among Republicans. Moreover, groups who are typically less-equipped to absorb increases in cost of living also exhibited stronger decreases in sentiment, including older consumers, lower- and middle-income consumers, and those with no stock holdings. With ongoing policy uncertainty including the Iran conflict, consumers anticipate further increases in gasoline prices both in the short and long run. In addition to the pocketbook issues that have been central to consumers’ views of the economy, they are increasingly worried that prospects elsewhere in the economy could be weakening. Expected year-ahead business conditions fell back 10%, along with a 13% drop for the five-year horizon. Any re-escalation of trade tensions will likely exacerbate these trends. This release covers interviews completed between July 28 and August 24.Year-ahead inflation expectations ticked down from 4.2% in July to 4.0%. The current reading substantially exceeds the 3.4% seen in February before the Iran conflict began, along with all 2024 readings. Long-run inflation expectations held steady at 3.3% for the third consecutive month, remaining a bit higher than its 2024 range of 2.8% to 3.2%.

Market attention is now on the Fed chair's speech from Jackson Hole.