U.S. Consumer Confidence Sees First Drop in Three Months, Inflation Concerns Rise

August 14th. Due to concerns about the deteriorating business situation and rising inflation at home, U.S. consumer confidence fell for the first time in three months. According to survey data released by the University of Michigan on Friday, the preliminary August consumer confidence index dropped to 51, below July's final reading of 55.2. Economists had a median forecast of 55. Consumers expect prices to rise by 4.3% in the next year, a slight increase from the previous month, and significantly higher than the level before the February Iran conflict. They also expect prices to rise at an annual rate of 3.3% over the next 5 to 10 years. After improving for two consecutive months, consumers' confidence in both short-term and long-term economic prospects has deteriorated. Since the beginning of the year, consumers' expectations for the labor market have remained largely unchanged.

The survey shows that consumers are increasingly concerned about inflation, while their concerns about unemployment have declined. The survey covered responses collected between July 28th and August 10th. During this period, the national average gasoline price in the United States has been hovering above $4 per gallon. Another report released on Friday showed that U.S. retail sales in July saw the largest decline in over a year, as consumers reduced purchases of automobiles and online stores. (FXStreet)