University of Michigan consumer sentiment fell about 8% in August, ending a two-month improvement, survey director Joanne Hsu said. Views of personal finances deteriorated only slightly, but business-condition expectations plunged, with short-run expectations down 11% and long-run expectations down 17%. Declines were broad across political groups; Republicans posted the largest monthly drop and are now 19% below their level before the Iran conflict, at their weakest since the 2024 election. Weak

University of Michigan consumer sentiment fell about 8% in August, ending a two-month improvement, survey director Joanne Hsu said. Views of personal finances deteriorated only slightly, but business-condition expectations plunged, with short-run expectations down 11% and long-run expectations down 17%. Declines were broad across political groups; Republicans posted the largest monthly drop and are now 19% below their level before the Iran conflict, at their weakest since the 2024 election. Weakness was concentrated among older, lower-income and non-college consumers, groups most exposed to inflation-driven purchasing-power losses. Only 8% of consumers expect their incomes to outpace inflation over the next year, down from 18% in December 2024. One-year inflation expectations rose to 4.3% in August from 4.2% in July, above the pre-conflict February reading of 3.4% and above all 2024 readings; long-run inflation expectations held at 3.3% for a third month, slightly above the 2024 range of 2.8–3.2%.