US consumer sentiment improved in August for the first time in five months as slower inflation and prospects for Federal Reserve interest-rate cuts helped lift expectations about personal finances.

Consumer confidence in the US improved slightly in early September, with the preliminary University of Michigan's Consumer Sentiment Index edging higher to 69 from 67.9 in August. This reading came in above the market expectation of 68. The Current Conditions Index rose to 62.9 from 61.3 and the Consumer Expectations Index improved to 73 from 72.1.

Cooling inflation and rising expectations of a potential interest rate cut have lifted U.S. consumer sentiment to its highest level in four months this September. The University of Michigan's preliminary report showed the sentiment index climbing to 69,

U.S. consumer sentiment rose to a four-month high in September amid expectations that inflation will continue moderating over the next year and household incomes improve, but views on the labor market weakened against the backdrop of slower job gains.

The positive outlook is the result of improvement in buying conditions and consumer expectations of their personal finances and the economy.

Americans' outlook on the economy improved for the second straight month in September, bolstered by lower prices for long-lasting goods such as cars and furniture and the prospect of interest rate cuts by the Federal Reserve.

U.S. consumer sentiment improved in September amid subsiding inflation, though Americans remained cautious ahead of the November presidential election, a survey showed on Friday.