The August Final came in at 74.1, up 1.6 from the July Final. Investing.com had forecast 72.8. Surveys of Consumers chief economist, Richard Curtin, makes the following comments:

"Consumer sentiment has remained trendless in the same depressed range it has traveled during the past five months. The August figure posted an insignificant gain of just +0.4 Index points above the April to July average. The small August gain reflected fewer concerns about the year-ahead outlook for the economy, although those prospects still remained half as favorable as six months ago. The pandemic has created distinctive consumer reactions to the economy (see the chart).

"Since the April shutdown of the economy, a sizable number of consumers thought conditions could hardly get any worse. The natural response was that economic conditions would improve given the absence of any negative economic causes for the recession. For example, while nine-in-ten consumers viewed the current state of the economy negatively in August, half of all consumers anticipated the economy would improve in the year ahead.

"Although half anticipates an improved economy, when asked to judge the performance of the economy, 62% judged that the overall conditions in the economy could be best described as unfavorable. Although strong gains in consumer spending from the 2nd quarter lows can be anticipated, those gains will significantly slow by year-end without some additional fiscal spending programs to diminish the hardships faced by unemployed workers, small businesses, as well as support for state and local governments. [More...]"

See the chart below for a long-term perspective on this widely-watched indicator. Recessions and real GDP are included to help us evaluate the correlation between the Michigan Consumer Sentiment Index and the broader economy.

To put August 28's report into the larger historical context since its beginning in 1978, consumer sentiment is 14.1% below the average reading (arithmetic mean) and 13.1% below the geometric mean. The current index level is at the 21st percentile of the 512 monthly data points in this series.

Note that this indicator is somewhat volatile, with a 3.0 point absolute average monthly change. The latest data point saw a 1.6 point increase from the previous month. For a visual sense of the volatility, here is a chart with the monthly data and a three-month moving average.

For the sake of comparison, here is a chart of the Conference Board's Consumer Confidence Index (monthly update here). The Conference Board Index is the more volatile of the two, but the broad pattern and general trends have been remarkably similar to the Michigan Index.

And finally, the prevailing mood of the Michigan survey is also similar to the mood of small business owners, as captured by the NFIB Business Optimism Index (monthly update here).