Source: University of Michigan
Consumer sentiment fell to its lowest level in nearly a decade in August, weighed down by the surge in COVID-19 delta cases and inflationary concerns during the month.
- The Index of Consumer Sentiment fell to 70.3 in August, the weakest reading since December 2011’s 69.9.
- This is 13.4% lower than July’s 81.2, marking the biggest drop in over a decade. It is also 5.1% lower than August 2020’s 74.1.
- Consumers reacted negatively to the surge in delta variant cases, the inflation uptick, slowing wage growth, and the smaller drops in unemployment figures.
- The Current Economic Conditions slipped 7.1% to 78.5 from 84.5 in July. This is also 5.3% lower than 82.9 the same month a year ago.
- The Index of Consumer Expectations plummeted 17.6% to 65.1 from 79.0 in July, and slipped 5.0% from 68.5 in August 2020.
- A similar decline was recorded in September 2005 when the sentiment index slipped 13.7% due to the impact of hurricane Katrina and the increase in energy prices.