The August survey results mark an 8% slide, reversing two months of gains and hitting levels not seen since the 2024 election. Joanne Hsu, director of the Surveys of Consumers, noted that business condition expectations dropped by 11% for the short term and 17% for the long term. This pessimism is particularly pronounced among older, lower-income, and non-college-educated consumers, who remain most susceptible to eroding purchasing power. Only 8% of respondents now anticipate income growth will outpace inflation, a notable decline from the 18% reported in December 2024.

Simultaneously, the data indicates renewed upward pressure on price expectations. Year-ahead inflation forecasts edged up to 4.3% from 4.2% in July, remaining well above the 3.4% level recorded in February. While long-run inflation expectations remained anchored at 3.3%, the figures stay elevated compared to the earlier 2024 range of 2.8% to 3.2%. Investors reacted to the cooling sentiment and rising inflation outlook by driving spot gold to $4,389.03 per ounce, a 0.87% gain following the 10 a.m. ET release.