US consumer sentiment slips in August as inflation fears resurface

US consumer sentiment declined for the first time in four months in August, according to a preliminary reading from the University of Michigan, falling to 58.6 from 61.7 in July — well below consensus forecasts of 62.

August's drop was principally due to renewed concerns over inflation and a sharp deterioration in buying conditions for durable goods.

The current conditions gauge fell to 60.9 from 68.0, while the expectations index eased to 57.2 from 61.7.

Short-term inflation expectations jumped to 4.9% from 4.5%, ending a two-month retreat, while the five-year outlook rose to 3.9% from 3.4%. However, both remained below peaks seen in April and May.

Despite a modest improvement in expectations for personal finances, consumers continued to anticipate higher inflation and rising unemployment ahead.

Reporting by Iain Gilbert at Sharecast.com