{"id":120540,"date":"2021-08-27T18:09:59","date_gmt":"2021-08-27T18:09:59","guid":{"rendered":"https:\/\/fin2me.com\/?p=120540"},"modified":"2021-08-27T18:09:59","modified_gmt":"2021-08-27T18:09:59","slug":"u-s-consumer-sentiment-plummets-to-near-decade-low","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/u-s-consumer-sentiment-plummets-to-near-decade-low\/","title":{"rendered":"U.S. consumer sentiment plummets to near-decade low"},"content":{"rendered":"
(Reuters) -U.S. consumer sentiment plunged to its lowest level in nearly a decade in August as consumers\u2019 views of their personal financial prospects continued to worsen due to smaller income gains amid higher inflationary trends, a survey showed on Friday.<\/p> The University of Michigan said its consumer sentiment index fell to 70.3 in August – the lowest since December 2011 – from July\u2019s final reading of 81.2. Economists polled by Reuters had forecast a reading of 70.7.<\/p>\n August\u2019s final reading was little changed from the preliminary reading of 70.2 earlier this month. The losses were widespread across all demographic groups and regions.<\/p>\n \u201cThe extraordinary falloff in sentiment also reflects an emotional response, from dashed hopes that the pandemic would soon end and lives could return to normal,\u201d Richard Curtin, the survey director, said in a statement.<\/p>\n The economy is still expected to grow this year at its fastest pace in four decades after falling into a brief recession in 2020 caused by the coronavirus pandemic.<\/p>\n However, the recovery is showing some indication of cooling off and COVID-19 cases have continued to climb in August as the more transmissible Delta variant spreads rapidly across the country. Labor shortages across the service sector also persist while supply chain disruptions have continued.<\/p>\n The survey\u2019s gauge of consumer expectations declined to 65.1 in August, its lowest reading since October 2013, from July\u2019s 79.0, and was little changed from the mid-month reading of 65.2.<\/p>\n The survey\u2019s one-year inflation expectation eased to 4.6% from 4.7% in July, while the survey\u2019s five-year inflation outlook ticked up to 2.9% from 2.8%.<\/p>\n \u201cWith the economy moving past peak growth and peak inflation, we expect cooler inflation readings in the coming months to support an uptick in optimism among consumers,\u201d said Mahir Rasheed, an economist at Oxford Economics. \u201cGreater vaccine uptake and a stronger labor market will also encourage greater optimism with vaccination rates improving while restraints on labor supply will relax in the fall.\u201d<\/p>\n Consumer spending, which accounts for more than two-thirds of U.S. economic activity, also slowed in July, supporting views that economic growth will ease in the third quarter.<\/p>\n