US Consumer Confidence Falls To Almost A Decade Low In August | Business and Economy News

The rise in inflation and the surge in the Delta variant of the coronavirus have seriously damaged the attitude of American consumers.

U.S. consumer confidence remained weak at the end of August amid lingering concerns over inflation and the coronavirus pandemic.

The University of Michigan’s final sentiment index fell to an almost ten-year low at 70.3 during the month, from 81.2 in July, data showed Friday. The figure was consistent with the preliminary reading and just below the median estimate of 70.8 in a Bloomberg survey of economists.

“The extreme consumer reactions were due to the surge in the Delta variant, higher inflation, slower wage growth and lower unemployment,” said Richard Curtin, director of the investigation, in a press release.

“The extraordinary drop in sentiment also reflects an emotional response, dashed hopes that the pandemic would end soon and that lives could return to normal without the reimposition of strict regulations on Covid,” he said.

If the drop in confidence translates into lower spending, economic growth could slow further in the coming months.

The investigation period, July 28 to August 23, also coincided with the Taliban takeover of Afghanistan and the start of the chaotic evacuation operation of US and Afghan citizens.

Respondents said they expect inflation to rise 2.9% over the next five to ten years, a three-month high. They expect prices to rise 4.6% over the next year – just below the 4.7% seen in the July survey, which was the highest in more than a year. decade.

Serious supply chain disruptions and a wider reopening of the economy have resulted in rapid price increases for a variety of goods and services. Soaring rents and house prices are straining Americans’ finances even more.

Meanwhile, the recent surge in Covid-19 cases has disrupted plans to return to work and school, forced events to be canceled and led many cities to reintroduce mask warrants.

A measure of expectations fell further in the second half of the month, falling to 65.1 from 65.2 in the preliminary reading, still the lowest since 2013. The current conditions gauge has improved slightly from the reading initial but remains the lowest since April of last year at 78.5.

Another indicator of consumer sentiment – which puts more emphasis on labor market opinions – will be released by the Conference Board on Tuesday.