The University of Michigan will release its preliminary August consumer sentiment index on Friday, with economists expecting the index to show American households growing more cautious as tariff-driven price increases and slowing hiring dent confidence. Wells Fargo and other major institutions anticipate a modest decline from July's reading.

The survey follows a Labor Department report showing US job growth fell below 100,000 in July, the weakest pace in months. Persistent uncertainty over the Trump administration's import tariffs has clouded the outlook for both consumers and businesses, according to analysts at Oxford Economics.

The Michigan index tracks households' views on current conditions and future expectations, and its inflation expectations component is closely watched by the Federal Reserve. Survey director Joanne Hsu has noted in recent months that consumers repeatedly cited tariffs as a source of concern about future prices.

The softening data adds to pressure on the Federal Reserve, which held interest rates steady at its late-July meeting. Traders in federal funds futures have increased bets on a rate cut in September, with policymakers weighing a cooling labour market against tariff-related inflation risks.

A weaker sentiment reading would reinforce fears that consumer spending, the main engine of the US economy, could slow into the autumn. Retailers reporting quarterly earnings this month, including discount chains, have flagged more value-conscious shoppers trading down.