USA: unexpected deterioration in consumer morale

(CercleFinance.com) – The morale of American consumers deteriorated markedly in August, according to the preliminary results of the monthly survey of the University of Michigan.

The confidence index established on the basis of this survey stood at 70.2 this month, against 81.2 last month, while economists expected it to be around 81 points.

If the sub-index measuring the judgment of households on their current situation is down sharply, to 77.9 against 84.5 in July, it is the component of expectations that has fallen the most.

The sub-index measuring consumer expectations fell to 65.2 in August, from 79 in July.

A dropout that Richard Curtin, author of the study, links to the recent resurgence of the coronavirus epidemic due to the spread of the new Delta variant.

The economist recalls that such sudden drops in the index, which lost 13.5 points this month, are generally associated with spectacular reversals in economic activity, as in April 2020 (-19.4 points) or in October 2008 (-18.1 points).

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