US Consumer Sentiment Falls as Inflation Expectations Climb

[lostincalifornia]

Source: Bloomberg News

"US consumer sentiment unexpectedly fell for the first time since April and inflation expectations rose on lingering anxiety about the impact of tariffs.

The preliminary August sentiment index fell to 58.6 from 61.7 a month earlier, according to data from the University of Michigan released Friday.

Consumers expect prices to rise at an annual rate of 4.9% over the next year, wiping out the prior month's improvement. They saw costs rising at an annual rate of 3.9% over the next five to 10 years.

Both the sentiment index and the inflation gauges were worse than economists had anticipated in a Bloomberg survey."

Read more: https://www.bloomberg.com/news/articles/2025-08-15/us-consumer-sentiment-falls-as-inflation-expectations-climb?srnd=homepage-americas

[DemocratSinceBirth]

1. Trump's tarrifs are reigniting inflation.

It's as if the laws of economics are immutable.

[progree]

6. US import prices rebound in July on higher consumer goods costs, Reuters, 8/15/25

https://finance.yahoo.com/news/us-import-prices-rebound-july-125456618.html

Import prices increased 0.4% last month after a downwardly revised 0.1% dip in June, the Labor Department's Bureau of Labor Statistics said on Friday. Economists polled by Reuters had forecast import prices, which exclude tariffs, unchanged after a previously reported 0.1% gain in June. ((so tariffs are additional to the 0.4% increase last month -Progree))

Though import prices do not include tariffs, the elevated readings suggested exporting nations are not cutting prices to offset the impact of higher costs from duties on consumers.

In the 12 months through July, import prices slipped 0.2% after falling 0.5% in June.

. . .

The trade-weighted dollar is down about 6.7% this year ((which make s our exports cheaper but our imports more expensive -Progree)).

[progree]

2. GRAPH of consumer sentiment

From the source: https://www.sca.isr.umich.edu/

Consumer Sentiment Index Graph - https://www.sca.isr.umich.edu/files/chicsr.pdf



Other than some of the last few months, and other than the trough when inflation peaked in mid-2022, consumer sentiment is lowest in 10 years.

(There's also a 50 year graph available).

What always gobsmacks me about this graph (and similar from the Conference Board's Consumer Confidence) was how paradisical people viewed the economy in Trump's pre-Covid years -- much higher sentiment than even the peaks of what followed (peaks in early 2021 and in early 2024). And certainly higher than in the fall of 2024 -- the months before the 2024 election.

[ananda]

3. I keep wondering whether Trump thought his tactics...

would improve the economy simply because he's white
and said so.

He's demented to the point that he thinks every spoken
word makes its own reality.

[llmart]

4. "Unexpectedly"???

Anyone who's paying attention was able to see how the GOP would tank the economy. They always do.

[progree]

5. GRAPH: Unemployment expectations and Inflation expectations

The thing to remember is that high is bad for both measures on this graph, which are worse than anytime in the 24 1/2 years depicted in the graph except briefly for a couple of periods.

Unemployment expectations even beat the dot-com bust.

[BaronChocula]

7. Funniest passage in the excerpt

Consumers expect prices to rise at an annual rate of 4.9% over the next year

What consumers are pulling out their calculators to determine future inflation rates? Is it the ones who voted for the lying conman because he said he would lower the price of eggs?