Michigan consumer sentiment hits 67.8, beating analysts’ expectations

The current economic conditions index decreased from 62.7 in July to 60.9 in August, while the consumer expectations index increased from 68.8 to 72.1.

Inflation expectations for the coming year remained unchanged at 2.9%. In the two years before the pandemic, inflation expectations for the coming year were between 2.3% and 3.0%. Long-term inflation expectations also remained unchanged at 3.0%.

The University of Michigan commented: “Overall, expectations strengthened for both personal finances and the five-year economic outlook, which reached their highest level in four months, consistent with the fact that electoral developments can influence future expectations but are unlikely to change current assessments.”

The US Dollar Index pulled away from session lows as traders reacted to the better-than-expected Michigan consumer sentiment report. Currently, the US Dollar Index is attempting to stabilize above the 102.75 level.

Gold retreated from session highs as traders focused on the rebound in the US dollar. However, gold stabilized near the psychologically important $2,500 level.

The SP500 is trying to stabilize above the 5,550 level, supported by the encouraging consumer sentiment report. Overall, equity traders remain optimistic after the strong rebound from the August lows.