The University of Michigan’s consumer sentiment index rose to 67.8 in a preliminary reading for August, from 66.4 in the previous month, marking the first increase since June.

Consumers’ assessments of the current economic situation fell to 60.9 in August from 62.7 in the previous month. However, the index for expectations for the future rose from 68.8 to 72.1 – the highest level since April.

According to Joanne Hsu, director of Surveys of Consumers, developments in the presidential election were a key driver of the August poll. Democratic sentiment rose 6% as Vice President Kamala Harris gained ground after replacing Joe Biden as the Democratic presidential nominee. Republican sentiment fell 5%.

“Overall, expectations increased both for personal finances and for the economic outlook for the next five years, reaching their highest level in four months. This is consistent with the fact that while the election outcome may affect future expectations, it is unlikely to change current assessments,” Hsu said.

Inflation expectations for the coming year were 2.9 percent for the second month in a row. In the two years before the pandemic, these expectations were between 2.3 and 3.0 percent.

Long-term inflation expectations stood at 3.0%, unchanged from the past five months. These expectations remain somewhat elevated compared to the 2.2-2.6% seen in the two years before the pandemic.

The poll found that 41 percent of consumers think Harris is the better candidate for the economy, while 38 percent think Trump is better.

“The survey responses generally relate to who consumers think will be the next president right now,” said Hue, who noted that consumer expectations may change as the presidential election campaign comes into greater focus. At the same time, however, consumers expect inflation – still their biggest concern – to continue to stabilize.