A key consumer sentiment reading saw a sharp decline in August as the surging Covid-19 increased concerns on the recovery of the U.S. economy.
- The consumer sentiment index dropped to 70.3 in its key August reading. That is down 13.4% from July’s reading of 81.2.
- Richard Curtin, Surveys of Consumers chief economist, stated that there was no lessening in late August in the degree of the collapse in consumer sentiment recorded in the first half of the month.
- The Consumer Sentiment Index dropped by 13.4% in July, posting the least favorable economic prospects in more than a decade.
- The Sentiment Index has recorded larger losses in six other monthly surveys, attributable to the Expectations Index and widespread across all demographic groups, regions, and the outlook for the economy.
The August slump of confidence does not imply an immediate downturn in the economy. Even though economic expectations started to improve by year-end, the emotional impact on spending patterns lasted for a longer than anticipated time.
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Source: Surveys of Consumers