U.S. consumer sentiment worsened in August from July, falling to its lowest level in 12 months as households grew uncertain about economic prospects due to high food and fuel prices and recent financial market turmoil.
The Reuters/University of Michigan Surveys of Consumers said its final August consumer sentiment index was 83.4, slightly above a median forecast of 82.7 but way below July's 90.4 reading.
A substantial part of the decline in sentiment was concentrated among households with incomes below $50,000. Their concerns were focused mainly on high fuel and food prices, the survey said.
Consumers' appetite for buying homes also weakened in August, according to the survey, due to mounting concerns about rising mortgage rates.
The survey also cited consumer pessimism arising from the recent turbulence in financial markets, linked to problems in the subprime mortgage sector.
"Overall, the drop-off in consumer sentiment is to be expected," said Brian Dolan, director of currency research at Forex.com in Bedminster, New Jersey.
"But I was actually taking solace from the fact that it did not deteriorate further. I was expecting the figure to drop to about 80, given what has happened in August," he added.
U.S. Treasury prices and the dollar showed little reaction to the August consumer sentiment numbers. Wall Street stocks were up but off their highs after Federal Reserve Chairman Ben Bernanke said it was not the central bank's job to bail out lenders and investors and offered no clear clues about the outlook for interest rates.
The survey's gauge of current consumer conditions slid to 98.4 in late August, down from July's reading of 104.5. The final August reading on consumer expectations also fell, to 73.7, compared with 81.5 the previous month.
The survey's one-year inflation index was at 3.2 percent, down slightly from 3.4 percent in July. The five-year inflation index likewise dipped, to 2.9 percent at the end of August from 3.1 percent at the end of July.