U.S. consumer sentiment fell to an 11-month low in early August, with households expressing concerns about the rising cost of living, potentially signaling a slowdown in consumer spending.

The University of Michigan Friday said its consumer sentiment index fell to a reading of 95.3 early this month, the weakest since September 2017, from 97.9 in July. The survey’s current conditions sub-index of consumer expectations dropped to 107.8 from July’s reading of 114.4.

It said the decline in sentiment was concentrated among households in the bottom third of the income distribution, adding that consumers’ views on prices for big-ticket household goods were the least favorable in nearly 10 years.

Inflation has been rising in recent months, driven in part by strong domestic demand and a labor market that is viewed as being near or at full employment.

Economists said some of the consumers’ unease with pricey goods could be linked to the Trump administration’s protectionist trade policy, which has led to an escalation of a trade war between the United States and China as well as tit-for-tat tariffs with the European Union, Canada and Mexico.

“The decline (in sentiment) suggests at face value that the recent escalation of trade tensions may be worrying some consumers,” said Andrew Hunter, a U.S. economist at Capital Economics. “But the details suggest that the bigger factor has been the recent rise in inflation.”

The consumer price index increased 2.9 percent year-on-year in July, matching June’s gain, which was the largest rise since February 2012.

(SD-Agencies)