U.S. consumer sentiment ebbed in July, but inflation expectations over the next year and beyond improved, a survey showed Friday.

The University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 66.0 this month, compared to a final reading of 68.2 in June. Economists polled by Reuters had forecast a preliminary reading of 68.5.

"Nearly half of consumers still object to the impact of high prices, even as they expect inflation to continue moderating in the years ahead," said Surveys of Consumers Director Joanne Hsu.

"With the upcoming election, consumers perceived substantial uncertainty in the trajectory of the economy, though there is little evidence that the first presidential debate altered their economic views."

The survey's reading of one-year inflation expectations dipped to 2.9% from 3.0% in June. Its five-year inflation outlook also fell to 2.9% from 3.0% in the prior month.