U.S. Consumer Sentiment Deteriorates in July As Covid-19 Cases Rise
Consumer sentiment in the U.S. decayed in July as the resurge in Covid-19 infections hurt consumers’ mood, according to a University of Michigan survey released Friday.
The final reading of the index of consumer sentiment stood at 72.5 in July, lower than the flash estimate of 73.2 early in the month and down from June’s 78.1. Economists surveyed by The Wall Street Journal had expected the indicator to be at 72.7.
The deterioration in consumer confidence breaks a two-month consecutive gain for the index, which plummeted in April amid across-country lockdowns to contain the coronavirus pandemic.
Consumer confidence is still 26.3% lower compared with the same month a year earlier, data showed.
“Consumer sentiment sank further in late July due to the continued resurgence of the coronavirus,” said Richard Curtin, the survey’s chief economist. “In the last four months, the sentiment index has remained trendless, averaging 73.7, a decline of 25% from the same period in 2019.”
Consumers’ assessment of the current economic conditions fell to 82.8 in July from 87.1 in June, and decreased from the flash reading of 84.2 two weeks ago.
The index of consumer expectations–which reflects the balance of respondents anticipating improved business conditions in the next six months–declined to 65.9 from June’s 72.3, and also decreased from the 66.2 preliminary estimate.
The data, compiled after a minimum of 500 interviews, covers three broad areas of consumer sentiment: personal finances, business conditions, and buying conditions.
“While the third quarter GDP is likely to improve over the record setting second quarter plunge, it is unlikely that consumers will conclude that the recession is anywhere near over,” Mr. Curtin said.
Source: Dow Jones