The economic sentiment of American consumers has declined for the first time in four months. Concerns are growing that President Donald Trump's tariff policy will drive up prices.
The University of Michigan announced on the 15th (local time) that the preliminary consumer sentiment index for August is 58.6, down 3.1 points from the previous month (61.7). This significantly missed expert projections (62.5, according to Dow Jones). This is the first decline in four months since April.
The consumer sentiment index, which was on a downward trend early this year amid uncertainty over tariffs from the Trump administration, saw a rebound after stagnating in May, thanks to progress in trade negotiations and a stock market rally in June and July; however, it has weakened again recently as the expansion of tariffs is interpreted to have increased inflationary pressure.
According to the University of Michigan report, American consumers' inflation expectations for the next year rose from 4.5% in July to 4.9% in August. The long-term outlook for the five-year inflation expectation also increased during the same period from 3.4% to 3.9%. This reflects the awareness that the price increase caused by tariffs may not be a short-term shock but could become more prolonged.