Consumer sentiment that fell sharply at the beginning of August improved only marginally and remained in deeply negative territory at the end of the month, according to final survey results published Friday by the University of Michigan.

“In addition to the pocketbook issues that have been central to consumers’ views of the economy, they are increasingly worried that prospects elsewhere in the economy could be weakening,” Joanne Hsu, director of surveys of consumers at the university, commented in the report.

The index of consumer sentiment ended August at 51.7, which is 11.2% lower than a year ago but marks a slight improvement from the 12.6% drop reported in the preliminary findings. The index hit an all-time low of 44.8 in May.

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The August decline pushed the index 6% lower than June, compared to a previously reported 7.8%, fueled by persistent inflation concerns and macroeconomic uncertainty.

“With ongoing policy uncertainty including the Iran conflict, consumers anticipate further increases in gasoline prices both in the short and long run,” added Hsu.

Consumers’ year-ahead inflation expectations edged down from July levels of 4.2% to 4% at the end of August — a reversal of the 4.3% rise that survey respondents expected earlier in the month. That nevertheless “substantially exceeds” prewar expectations of 3.4% observed in February, said Hsu.

The personal consumption expenditures (PCE) index, which is the Federal Reserve’s preferred inflation gauge, came in hotter than forecast at 3.7% on an annualized basis in July, the Bureau of Labor Statistics reported this week.

The emphasis on inflation concerns in the end-of-month survey results differs from the focus on deteriorating business conditions that dominated consumer concerns at the beginning of August.

Sentiment on current and future business conditions remained overwhelmingly gloomy, however. The index tracking current economic conditions declined 5.3% from June and was nearly 16% lower than a year ago at 51.9, roughly matching the preliminary findings.

The overall index of consumer expectations slid 7% on a monthly basis and about 8% on a year-over-year basis to land at 51.5.

“Expected year-ahead business conditions fell back 10%, along with a 13% drop for the five-year horizon,” explained Hsu. “Any reescalation of trade tensions will likely exacerbate these trends.”

With the interviews for the final August survey having been conducted between July 28 and Aug. 24, major tariffs levied by the U.S. and Canada on each other in recent days would not have been reflected in the final August survey results.

Canada was the second-largest U.S. trading partner in 2025 behind Mexico, according to the Congressional Research Service, accounting for approximately $877 billion in combined U.S. imports and exports across goods and services.