WASHINGTON (MNI) – The final reading of U.S. consumer sentiment
plummeted recovered slightly in August, after initially being reported
at levels not seen since May 1980, according to the Reuters/University
of Michigan Consumer Sentiment survey released Friday.

The index came in at 55.7 — above median expectations of 55.5 —
vs. 54.9 reported in preliminary report August 12. The consumer
sentiment index was 63.7 in July and 71.5 in June.

The index’s final measure of consumers’ view of current conditions
in August came in at 68.7, down from the August’s initial reading of
69.3 and is the lowest reading since August 2009. The index was 75.8 in
July, and 82.0 in June.

Meanwhile the final gauge of consumers’ expectations climbed up to
to 47.4 from 45.7 reported in the preliminary report. This after coming
in at 56.0 in July and 64.8 in June.

Consumers’ final 1-year inflation expectations for August was 3.5%,
up from the preliminary expectation of 3.4%. The expectation was 3.4% in
July. Final five-year inflation expectations are at 2.9% unchanged from
the preliminary report and last month.

The low levels of consumer sentiment is hardly surprising, coming
as U.S. growth remains anemic, and concerns remain about what can be
done to get the economy firing on all cylinders again. The U.S.
Department of Commerce Friday revised down its estimate for real GDP
growth in the second quarter to 1.0% from the 1.3% advance estimate.
Perhaps more important, about two-thirds of the way into Q3, real growth
appears to remain lackluster.

As Market News International’s Joe Plocek noted in his analysis of
the Q2 GDP data [08:30am ET], “With almost 2/3 of the Q3 calendar
complete, real spending appears weak. That is because the rate of
inflation is matching retail sales growth. August sales data are due
next week, and are expected to continue to show modest gains. That means
Q3 real growth probably will not pick up much from the slow pace of H1.”

Also, U.S. data released Thursday showed initial jobless claims
remained above the 400,000 level, as claims for U.S. state unemployment
benefits rose 5,000 to a level of 417,000 after seasonal adjustment in
the August 20 week. The previous week’s claims were revised up to a
level of 412,000 from the initially reported level of 408,000.

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

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