Top Stories
Top Stories
Economy

US consumer sentiment falls to 89.8 in August for biggest monthly drop since 2012

Key Points
  • Economists polled by Refinitiv expected the final read on August consumer sentiment to reach 92.1.
  • The drop comes after a turbulent month in the trade war between the United States and China.
  • "While the overall level of sentiment is still consistent with modest gains in consumption, the data nonetheless increased the likelihood that consumers could be pushed off the 'tariff cliff' in the months ahead," says Richard Curtin, chief economist for the Survey of Consumers.
Residents shop at a Walmart store on August 29, 2019 in Orlando, Florida.
Gerardo Mora | Getty Images

The University of Michigan's final print on its consumer sentiment index came in at 89.8 for August, falling below the preliminary reading from two weeks ago.

The index was at 98.4 in July, making this the largest monthly decline since December 2012. Economists polled by Refinitiv expected the final read on August consumer sentiment to reach 92.1.

The drop comes after a turbulent month in the trade war between the United States and China.

"Trump's tariff policies have been subject to repeated reversals amid threats of higher future tariffs. Such tactics may have some merit in negotiations with China, but they act to increase uncertainty and diminish consumer spending at home," Richard Curtin, chief economist for the Survey of Consumers, said in a release.

President Donald Trump announced Aug. 1 that the U.S. would impose tariffs on an additional $300 billion of goods imported from China. Some of the tariffs are scheduled to take effect in September, while others have been delayed until Dec. 15 or removed.

China announced last week that it would retaliate with new tariffs on products from the U.S. and resume those on cars and auto components.

The survey found that consumers who mentioned tariffs unprompted were more likely to expect higher inflation and rising unemployment. 1 in 3 consumers mentioned the tariffs spontaneously, Curtin said.

"While the overall level of sentiment is still consistent with modest gains in consumption, the data nonetheless increased the likelihood that consumers could be pushed off the 'tariff cliff' in the months ahead," Curtin said.

Get the market reaction here.