US consumer confidence rises past forecasts in August, University of Michigan says

Consumer confidence in the US picked up more strongly than first thought in August, led by an improved outlook for the economy one-year ahead, the results of a closely-followed survey revealed.

The University of Michigan's consumer confidence index increased from 51.5 at the end of July to 58.2 (consensus: 55.1).

Nearly all of the improvement was concentrated in the sub-index for expectations, which jumped from 47.3 to 58.0.

That sub-index tracking current economic conditions on the other hand only edged up from 58.1 to 58.6.

Survey director, Joanne Hsu, said the outlook improved across the board, regardless of age, education, income, region or political affiliation thanks to the slowdown in inflation.

Nevertheless, it was lower income consumers who posted the biggest gains across all index components.

"Their sentiment now even exceeds that of higher-income consumers, when it typically lags higher-income sentiment by over 15 points," she said.

"Hopefully this tentative improvement will continue, as overall sentiment remains extremely low by historical standards."

Significantly, a gauge for consumers' expectations for inflation one year ahead fell back from 5.2% in July to 4.8% - plumbing its lowest reading for eight months.

Yet "uncertainty over expectations rose considerably, particularly among lower-educated consumers," Hsu said.

Expectations for over the long-run, between 5-10 years that is, printed at 2.9%, which remained within the 2.9-3.1% range observed over the past year.