Consumer confidence dropped sharply in August, setting the biggest drop since the economic shutdown in April 2020. Coronavirus cases surge All over the country.
according to University of Michigan sentiment index, Consumer confidence fell by 13.5% from July to August, down 11 points to 70.2, and sentiment fell by 5.3% year-on-year.A general decline in income, age, and education subgroups observed in all regions of the U.S.
The August low marked a significant drop in consumer confidence and was slightly lower than the low of 71.8 in April 2020 when the United States closed non-essential businesses to help prevent the spread of the coronavirus.
The university stated that in the past half-century, the sentiment index has fallen only more than the fall in August in the other six monthly surveys. All of this is due to sudden negative changes in the economy, including a 19.4% drop in sentiment due to the economic shutdown in April 2020, and an 18.1% drop in consumer confidence due to the Great Recession in 2008.
However, in this report, consumers pointed to expected losses in all aspects of the economy, from personal finances to inflation and unemployment.
According to Richard Curtin, the chief economist of the University of Michigan Consumer Survey, the resurgence of the pandemic caused by the Delta variant is undoubtedly a “mixture of reason and emotion.”
He continued, “Consumers have correctly inferred that economic performance will decline in the next few months, but the abnormal surge in negative economic evaluations also reflects an emotional response, mainly hope. Pandemic It will end soon.
“In the next few months, consumers are likely to again express more reasonable expectations and control Delta variant, Turn to utter optimism. Consumer response to Delta’s moderately increased preventive measures shows that it is difficult to produce the best policy response,” Curtin added.
For the first quarter as a whole, the annual rate of actual consumption growth may be only 1%, and GDP growth may be slightly stronger than 2%.
Photo: Reuters
