US consumer sentiment rises in August; inflation expectations steady

(Reuters) - U.S. consumer sentiment rose in August, while inflation expectations remained unchanged over the next year and beyond, a survey showed on Friday.

The University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 67.8 this month, compared to a final reading of 66.4 in July. Economists polled by Reuters had forecast a preliminary reading of 66.9.

The survey noted that for consumers surveyed, sentiment for Democrats jumped 6% in the wake of Vice President Kamala Harris replacing President Joe Biden as the Democratic nominee for president.

For Republicans, sentiment moved in the opposite direction, declining 5% in August. The survey showed 41% of consumers viewed Harris as the better candidate for the economy, while 38% chose Republican nominee Donald Trump.

"Overall, expectations strengthened for both personal finances and the five-year economic outlook, which reached its highest reading in four months, consistent with the fact that election developments can influence future expectations but are unlikely to alter current assessments," said Surveys of Consumers Director Joanne Hsu.

The survey's reading of one-year inflation expectations was unchanged at 2.9% August compared to July. Its five-year inflation outlook was also unchanged at 3.0%.

Earlier this week, an alternative sentiment survey run by the New York Federal Reserve showed medium-term inflation expectations eased substantially among consumers in July, even as their near- and longer-term outlooks for price pressures held steady.