By Brai Odion-Esene

WASHINGTON (MNI) – U.S. consumer sentiment rose in August according
to the final reading of the Reuters/University of Michigan Consumer
Sentiment data released Friday.

The index came in at 68.9, lower than the preliminary estimate of
69.6, but up compared to July’s final reading of 67.8.

The index’s final number for current conditions came in unchanged
at 78.3 for August, up from July’s final reading of 76.5. Expectations
fell to 62.9 vs. 64.1 reported at the beginning of the month.

The preliminary 1-year inflation expectations by consumers came in
at 2.7% compared to the preliminary expectation of 2.8%. Five-year
inflation expectations were 2.8% vs. the 2.7% preliminary reading and
July’s final reading of 2.9%.

The median forecast in the Market News International survey of
economists was for the index to remain unchanged at 69.6.

The downward revision in August consumer sentiment comes on the
back of a slew of disappointing U.S. economic data seen so far this
month, increasing concerns that the recovery has stalled.

Friday morning, U.S. second quarter GDP was revised lower to a 1.6%
annual rate on a wider net export gap and downward adjustments to
inventories, residential fixed investment, and government spending, data
released by the Commerce Department Friday morning showed. It places
second quarter growth even further below the pace of growth in the two
previous quarters.

Thursday morning, although the Labor Department reported that
initial claims for U.S. state unemployment benefits fell by 31,000, they
remain at an elevate level — 473,000 in the August 21 week.

With data Tuesday and Wednesday showing that businesses cut back in
spending in July — durable goods orders rose by a mere 0.3% — and that
the housing market remains weak — new single-family home sales fell
12.4% to a record low 276,000 annual rate in July while sales of
existing single-family homes plummeted a record 27.2% in July to 3.83
million — all attention shifts to the upcoming speech by Federal
Reserve Chairman Ben Bernanke to sooth the financial markets’ angst.

** Market News International Washington Bureau: 202-371-2121 **

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