Reuters/University of Michigan August consumer sentiment index up from year ago
US consumer sentiment slid from earlier this month but increased from both the year ago and the prior month. The final Thomson Reuters/University of Michigan index for August was 68.9, up 4.9% from 65.7 a year earlier and 1.6% higher than 67.8 for July. Analysts were projecting the figure to come in at 69.6, according to Reuters. The consumer expectations index of the monthly survey fell 3.2% from the year ago to 62.9 from 65, yet was 1% higher than the 62.9 reported for July. “The economic uncertainty that now exists has caused consumers to reduce their spending and increase their precautionary saving,” Richard Curtin, chief economist for the survey, said. “The lesson of the financial crisis for consumers was that their best defense against economic adversity was to reduce their own debt.” The survey’s current conditions index for August rose 17.6% from the year earlier and increased 2.4% from July. “The bad news is that consumers expect lackluster income and job growth for an extended period of time,” Curtin said. “While the data indicate a slowdown in the pace of growth in consumption that will last into 2011, outright declines in consumer spending are very unlikely. None- theless, the finances of consumers remain quite weak, and any additional erosion could quickly reduce their spending even more. Write to Jason Philyaw.