(Reuters) - U.S. consumers see inflation continuing to moderate in the next year, with a gauge of price growth expectations published on Friday at the lowest level in August since late 2020.

The University of Michigan's monthly consumer sentiment index survey showed households' one-year inflation expectation at 2.8%, down from 2.9% in July and now the lowest since December 2020. The five-year outlook for price growth was unchanged at 3.0%.

The wider survey showed a modest improvement in consumer sentiment this month, with the uptick having significant political overtones as the Nov. 5 U.S. presidential election approaches.

The overall sentiment index edged up to 67.9 in August from July's eight-month low of 66.4, snapping a four-month slide. The increase largely came from self-described political independents, Joanne Hsu, the director of the University of Michigan's Surveys of Consumers, said in a statement.

"Sentiment this month reflects a slight rise in sentiment among independents, as Democrats and Republicans offset each other almost perfectly," Hsu said. "Democrats exhibited a large 10% increase in sentiment while Republicans posted an equally sized decline."

Hsu said the patterns reflect "a sea change" in election expectations this month, with Vice President Kamala Harris taking over as the Democratic presidential candidate after President Joe Biden bowed out of the race.

In July, University of Michigan data showed 51% of consumers expected Republican nominee Donald Trump to win the election, versus 37% for Biden, Hsu said. That has since flipped and now 36% of consumers expect Trump to win compared with 54% for Harris.