Consumer Confidence Drops Unexpectedly in August | National News

William Arsn

Consumer confidence fell unexpectedly in the first two weeks of August to its lowest level in six years as households grew increasingly worried about the economy following a sustained surge in coronavirus cases this summer.

The Conference Board said Tuesday that its consumer confidence index, which measures how optimistic consumers feel about the economic outlook, dropped to a reading of 84.8 this month, down from 91.7 in July.

The reading is significantly lower than what analysts predicted and a drastic drop from a year ago. In August 2019, the index sat at 134.2.

The measure is a worrying sign that comes as the economy struggles to recover from a pandemic-induced recession.

“Consumer spending has rebounded in recent months but increasing concerns amongst consumers about the economic outlook and their financial well-being will likely cause spending to cool in the months ahead,” Lynn Franco, senior director of economic indicators at The Conference Board, said in a statement.

The consumer confidence index is closely watched because consumer spending accounts for about 70{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05} of economic activity.

Consumers’ assessment of both the present economic situation and the short-term outlook fell. The percentage of consumers who believe business conditions are “good” declined to 16.4{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05}, while those who believe conditions are “bad” increased to 43.6{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05}.

The share of consumers who are expecting business conditions to improve in the next six months also fell, to 30{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05}, and the share who expect things to worsen increased slightly to 20.5{5667a53774e7bc9e4190cccc01624aae270829869c681dac1da167613dca7d05}.

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