Last Update: 15-Aug-14 10:07 ET
- The University of Michigan Consumer Sentiment Index fell to 79.2 in the August preliminary reading from 81.8 in July. The Briefing.com consensus expected the index to fall to 81.7.
- Even though gasoline prices improved and employment conditions firmed, a large decline in equity prices was likely responsible for the drop in consumer sentiment.
- The Current Conditions Index increased to 99.6 in the preliminary August reading from 97.4 in July.The Expectations Index fell to 66.2 from 71.8. That was the lowest expectations reading since it fell to 62.5 in October 2013.
- Consumption growth is not reliant upon sentiment. As long as income growth remains on a positive trend, the drop in consumer sentiment should have a limited effect in reducing consumption growth.
- Consumer sentiment has little influence on consumption. As long as payroll levels continue to expand, the resulting income growth should keep consumption gains steady regardless of the monthly ebbs and flows in sentiment.