The slump in the University of Michigan measure of consumer sentiment to a three-month low of 58.6 in August, from 61.7, suggests that households remain very nervous about rising inflation in the wake of President Trump’s latest volley of reciprocal tariff hikes. One-year ahead inflation expectations rebounded to 4.9% from 4.5%, while five-year expectations strengthened to 3.9%, from 3.5%. Those increases in inflation expectations were widespread across demographic groups and political affiliation.
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