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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 (19)
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
Raymond Chen
Raymond Chen Aug 13, 2021 11:14AM ET
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If the retailers cannot transfer the additional cost due to inflation to the consumers, we will expect more and more manufacturers are going to bankrupt and the crisis is coming.
Sevantilal Patel
Sevantilal Patel Aug 13, 2021 10:54AM ET
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Seems like consumers are smarter than ph.d.at Fed.
Fakhri Alisoy
Fakhri Alisoy Aug 13, 2021 10:49AM ET
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get green down
ben sc
ben sc Aug 13, 2021 10:47AM ET
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Inflation is also a lagging indicator which all the journos casually fail to mention. If it's 5% now, it will likely double once these taxing bills are implemented. The only economist the admin can highlight that supports the wreckless spending is Stiglitz, a fan of Venezuela and central planning failures.
David Helms
David Helms Aug 13, 2021 10:47AM ET
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My economics professor told me many years ago regarding inflation; it is like speeding down a dark road at night and suddenly a pedestrian appears in your headlights. By the time you see them it is too late.
ben sc
ben sc Aug 13, 2021 10:44AM ET
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All big ticket items are at all time highs; housing, autos, appliances. Inflation is much higher than 5.4%, especially if you have purchased anything of value. Sure if all you have bought is underwear, eggs, and milk uts only 5%. Let's print another 5T!
Ronald Warren
Ronald Warren Aug 13, 2021 10:44AM ET
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Darn Right!!
Roger Miller
Roger Miller Aug 13, 2021 10:42AM ET
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Central planner Powell better get the helicopter fired up.
NUNO LOUREIRO
NUNO LOUREIRO Aug 13, 2021 10:41AM ET
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No problem for stocks.... Let's go another ATH
la popeye
la popeye Aug 13, 2021 10:40AM ET
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inflation, unless a crash, will go higher than 5% in reality but the gov will downolay it as they have the int. of debt to pay ( or roll over the next administration)..
Connecticut Yankee
A_Jaundiced_Eye Aug 13, 2021 10:26AM ET
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Did you enjoy the "Biden Bump?" Did you?...BECAUSE IT'S OVER !!!
Show previous replies (1)
la popeye
la popeye Aug 13, 2021 10:26AM ET
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because it is not over....
Fakhri Alisoy
Fakhri Alisoy Aug 13, 2021 10:26AM ET
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there is no chance for poor people no matter who is in power
David Helms
David Helms Aug 13, 2021 10:26AM ET
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la popeye  Biden frightening consumers with historically high debt and unsustainable left wing policies. Not to mention a president in obvious and rapid cognitive decline.
Von Braun
Von Braun Aug 13, 2021 10:26AM ET
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la popeye  January 2020 economy at all time high. Consumer confidence off he charts. Unemployment at historic lows. More people working and bringing home paychecks in history. I think your memory is a little off. It only took Biden about 6 months to wreck an economy. One thing for sure is that if these numbers happened while Trump was president there would be wall to wall coverage of the Trump economy. But, since this is Biden the administration is never mentioned. They did that with Obama, too, by the way.
Chuck Shults
Chuck Shults Aug 13, 2021 10:26AM ET
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Too many lefties who think Dem president automatically means amazing economy. Hate to say it but I think Obama got lucky or our country wasn't mired enough in debt for their policies to have any effect.  The current inflation tells me those days are long gone.
 
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