NEW YORK – U.S. consumer sentiment retreated in August from last month's six-year high, though Americans were slightly more upbeat in their outlook than earlier in the month, a survey released on Friday showed.
The Thomson Reuters/University of Michigan's final reading on the overall index on consumer sentiment slipped to 82.1 in August from 85.1 in July.
The final result did manage to top an initial mid-month reading of 80.0 and beat economists' expectations for a final read of 80.5.
"Most of the late August gain was due to more favorable income expectations, with consumers expecting the largest income gains in nearly five years, although the median expected increase was just 0.9 percent, less than the expected rate of inflation," survey director Richard Curtin said in a statement.
However, households with incomes below $75,000 grew more pessimistic about the future, and all households expected higher interest rates over the next year and slightly slower growth.
That helped drive the gauge of consumer expectations down to 73.7 from 76.5. The survey's barometer of current economic conditions slipped to 95.2 from 98.6 in July.
Long-term interest rates have risen by more than a full percentage point over the last three months on the view that the Federal Reserve will start scaling back as soon as next month its hefty support for the economy.
That has pushed up mortgage rates. Economists fear consumer sentiment could weaken if higher interest rates start to slow momentum in a housing revival that has been one of the brightest spots in the overall U.S. recovery
The one-year inflation expectation fell to 3 percent from 3.1 percent while the five-to-10-year inflation outlook edged up to 2.9 percent from 2.8 percent.
(Reporting By Steven C. Johnson; Editing by Chizu Nomiyama)