What happen? Consumer Sentiment Deteriorates In August

<p>&nbsp;A survey of consumer sentiment showed that sentiment remained close to a two-year high in August, but Americans showed greater concern about the future of the economy.</p><p><br /></p><p>The final reading of the August sentiment survey slipped to 69.5 from an earlier reading of 71.2, according to the University of Michigan on Friday. The index hit a 22-month high in July.</p><p><br /></p><p>This consumer sentiment survey reveals how consumers feel about their personal finances as well as the economy more broadly.</p><p><br /></p><p>An indicator that measures what consumers think about the current state of the economy recorded a reading of 75.7 at the end of August compared to the initial figure of 77.4</p><p><br /></p><p>A measure of expectations for the next six months fell to 65.5 from earlier figures of 67.3 in early August and 68.3 in July.</p><p><br /></p><p><br /></p><p>Americans think inflation will average 3.5% over the next year, slightly higher than a few months ago. The official rate of inflation is 3.2%, based on the consumer price index, although other measures show prices are rising faster.</p><p><br /></p><p>Steady economic growth, very low unemployment and slowing inflation have made Americans less worried about recession.</p><p><br /></p><p>However, interest rates are high and will likely remain so throughout the next year as the Fed acts to control inflation. Higher borrowing costs will almost certainly depress the economy and possibly increase unemployment.</p><p><br /></p><p>"Consumers see that the rapid improvement in the economy in the past three months has slowed, especially with inflation, and they are cautious about future projections," said Joanne Hsu, director of the survey.</p><p><br /></p><p>The Dow Jones Industrial Average and the S&amp;P 500 on the other hand rose in Friday trading.</p>