FX.co ★ US Consumer Sentiment Falls in August

The University of Michigan’s consumer sentiment index fell to 51.0 in early August 2026, down from 55.2 in July and below market expectations of 54.5, halting a two-month streak of improvement. Both major components weakened: the current conditions index declined to 51.8, while the expectations index slid to 50.6.

The downturn was broad-based across political and demographic groups, with especially pronounced declines among older, lower-income, and less-educated consumers—segments that tend to be more vulnerable to rising prices. Expectations for business conditions deteriorated markedly, with assessments for the year ahead dropping 11% and longer-term expectations down 17%.

Inflation concerns edged higher. Year-ahead inflation expectations rose to 4.3% from 4.2%, while long-term expectations were unchanged at 3.3%. Only 8% of consumers now anticipate their incomes will outpace inflation, a steep decline from 18% in December 2024.