2020.08.1414:11:00UTC+00U.S. Consumer Sentiment Unexpectedly Edges Higher In August

A preliminary reading released by the University of Michigan on Friday unexpectedly showed a slight improvement in U.S. consumer sentiment in the month of August.

The report said the consumer sentiment index inched up to 72.8 in August from 72.5 in July. The uptick surprised economists, who had expected the index to edge down to 72.0.

Surveys of Consumers chief economist Richard Curtin noted consumer sentiment in early August remained largely unchanged from both the July reading and the April low of 71.8.

"Two significant changes since April have been that consumers have become more pessimistic about the five-year economic outlook (-18 points) and more optimistic about buying conditions (+21)," Curtin said.

The modest increase by the consumer sentiment index came as the index of consumer expectations crept up to 66.5 in August from 65.9 in July.

On the other hand, the current economic conditions index slipped to 82.5 in August from 82.8 in the previous month.

The report said one-year inflation expectations remained at 3.0 percent for the third straight month, while five-year inflation expectations ticked to 2.7 percent from 2.6 percent.

"Consumers anticipate declines in the national unemployment rate to significantly slow and expect a rising rate of inflation during the year ahead," Curtin said.

He added, "While a positive growth rate in consumption is anticipated in the 2nd half of 2020, it will hardly herald the end of the coronavirus recession."