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Consumer Sentiment in U.S. Plunges to Lowest Since 2011

EconomyAug 13, 2021 10:18AM ET
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© Reuters. Consumer Sentiment in U.S. Plunges to Lowest Since 2011

(Bloomberg) -- U.S. consumer sentiment fell in early August to the lowest level in nearly a decade as Americans grew more concerned about the economy’s prospects, inflation and the recent surge in coronavirus cases.

The University of Michigan’s preliminary sentiment index fell by 11 points to 70.2, the lowest since December 2011, data released Friday showed. The figure fell well short of all estimates in a Bloomberg survey of economists.

The slump in confidence risks a more pronounced slowing in economic growth in coming months should consumers rein in spending. The recent deterioration in sentiment highlights how rising prices and concerns about the delta variant’s potential impact on the economy are weighing on Americans.

“Consumers have correctly reasoned that the economy’s performance will be diminished over the next several months, but the extraordinary surge in negative economic assessments also reflects an emotional response, mainly from dashed hopes that the pandemic would soon end,” Richard Curtin, director of the survey, said in the report.

The expectations gauge plummeted almost 14 points to 65.2, the lowest since October 2013. A measure of consumers’ outlook for the economy over the coming year soured, falling the most since the onset of the pandemic in March 2020.

Consumers also became decidedly downbeat about their income prospects. The gauge of expected personal finances fell to a seven-year low.

An index of current conditions dropped to 77.9, the lowest since April of last year, according to the survey conducted July 28 to August 11.

Consumers expect inflation to rise 3% over the next five to ten years, an increase from the 2.8% seen last month and matching the highest level since 2013. They expect prices to advance 4.6% over the next year, a slight pullback from the 4.7% seen in the July survey.

Concerns about the variant have accelerated in recent weeks. A number of U.S. cities have reintroduced mask requirements, and events such as the upcoming New York International Auto Show have been cancelled. Meantime, several companies including Alphabet (NASDAQ:GOOGL) Inc.’s Google, Amazon.com Inc (NASDAQ:AMZN). and BlackRock Inc (NYSE:BLK). have all recently pushed back plans to return to the office.

The Michigan report showed buying conditions deteriorated to the lowest since April of last year.

©2021 Bloomberg L.P.

Consumer Sentiment in U.S. Plunges to Lowest Since 2011
 

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Comments (18)
Kevin Avila
Kevin Avila Aug 15, 2021 12:39AM ET
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… a bit delayed… Ever worsening conditions on the horizon.
Chuck Shults
Chuck Shults Aug 13, 2021 10:25PM ET
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If that's actually true and nothing improves I don't think Democrats are holding congress after 2022
Chuck Shults
Chuck Shults Aug 13, 2021 10:24PM ET
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If that holds Dems are toast 2022.
Haroon Ellahi Shaikh
Haroon Ellahi Shaikh Aug 13, 2021 3:36PM ET
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Make America Great Again. What sort of a lousy expectations report is this? How bad is it there emotionally?
Haroon Ellahi Shaikh
Haroon Ellahi Shaikh Aug 13, 2021 3:33PM ET
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Where do we go from here guys?
perplexed76 .
perplexed76 . Aug 13, 2021 2:15PM ET
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FED is right, inflation is temporary, deflation is coming.
Chuck Shults
Chuck Shults Aug 13, 2021 2:15PM ET
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Isn't that good if you have a lot of savings?
Sean Plankey
Sean Plankey Aug 13, 2021 2:15PM ET
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We've been inflating the money supply for more than 50 years. Buying our own debt thru inflation since 2009 since Obama and Ben Bernanke ushered in "debt monetization". Inflation will continue IN PERPETUITY.
David Helms
David Helms Aug 13, 2021 12:28PM ET
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Fed Chair Ben Bernake in March of 2008 "The subprime mortgage problem is contained and there is no systemic threat to the economy"
David Fisher
David Fisher Aug 13, 2021 12:28PM ET
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Famous last words by the Emperor with no clothes who was worshipped for no apparent reason.
Ricardo Diogo
Rcd72 Aug 13, 2021 11:59AM ET
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FED is living in another world..other " transitory" reality ... so off that is inexplicable...
Ricardo Diogo
Rcd72 Aug 13, 2021 11:57AM ET
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thank you FED! it is "transitory" ....
Ronald Warren
Ronald Warren Aug 13, 2021 11:22AM ET
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Where's the correction?
Jon Bal
Jon Bal Aug 13, 2021 11:22AM ET
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it was the 5-minute red candle at 09:55
 
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