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WASHINGTON (AP) — U.S. consumer sentiment ticked up in August, driven by greater optimism about jobs, rising incomes, and increasing wealth. Yet the increase largely occurred among higher-income groups.
The University of Michigan said Friday its index of consumer sentiment rose to 82.5 from 81.8 in July. The August level is only slightly higher than it was a year ago.
Consumers have sent mixed signals in recent months. The Michigan index has fluctuated between 80 and 82.5 since December. But a measure of consumer confidence by the Conference Board rose this month to nearly a seven-year high.
And yet Americans cut back their spending in July, according to a government report Friday. Consumer spending slipped 0.1 percent last month, the first drop since January. The decline was driven by a drop in spending on autos, which took a breather after several months of strong sales.
Nearly 60 percent of households in the top third of income earners say they are financially better off this month, the Michigan survey found, compared with only 36 percent in the bottom two-thirds. And nearly a quarter of households in the top third said they were wealthier, likely due to stock market gains, compared with just 2 percent in the bottom two-thirds.
"The stability in consumer expectations during the past nine months has helped to insulate the economy from much larger swings in business investments," said Richard Curtin, an economist at the University of Michigan and director of the survey. "At the same time, the problem is that confidence has been unable to rise above those modestly positive levels."
Curtin blamed the sluggishness of wage growth, which has barely kept up with inflation since the recession ended more than five years ago. That "has prevented the reestablishment of a more broadly based optimism," he said.
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