Friday, August 12, 2011

Consumer Sentiment Fell to Lowest Level Since 1980

Consumer confidence plunged in August to its lowest level since 1980, according to the University of Michigan’s Consumer Sentiment Survey. Confidence fell 8.8 points to 54.9, below the lowest level seen in the recession.

The index has now fallen 20 points in three months, a decline that has only been exceeded twice, in 1990 and 2005. The fall is likely a result of fears generated by the debt-ceiling debate and S&P’s downgrade of the U.S. credit rating. Recent volatility and declines in the stock market also played into the fall.

The decline was driven by both present conditions and future expectations, which declined the most, falling from 56.0 in July to 45.7 in August.

Expectations for inflation were unchanged from July, with one year expectations at 3.4%. The inflation index has dropped 1.2 percentage points since April as gasoline prices have fallen.


Anonymous said...

What's going on with the chart? Looks like the first box is supposed to be August. Are the "August" Future Expectations supposed to be 45.7 or 54.7? Why are the April and May Future Expectations numbers so low?

Banks and the Economy 1 said...

Thank you for pointing that out. We replaced the chart with a new one.

- Banks and the Economy Staff

Post a Comment

Please read our comment policy before making a comment.