EmailThe Conference Board’s Consumer Confidence Index fell from a negatively revised 65.4 (from 65.9) in July to 60.6 in August. That is the lowest level of confidence since November 2011. The Briefing.com consensus pegged the index at 65.7.
The drop in confidence contrasted with the preliminary reading of the August University of Michigan Consumer Sentiment Index. That indicator increased from 72.3 in July to 73.6. Current conditions were virtually unchanged as the related index fell slightly from 45.9 in July to 45.8 in August. The recent improvements in the labor market combined with higher equity prices likely offset higher oil/gasoline prices. The expectations index fell from 70.5 in July to 78.4 in August.
The decline may be the result of negative political ads about the economy lowering consumer expectations about future economic growth. Consumption growth normally relies on income growth and not sentiment. However, with uncertainty becoming more prominent in the economy, that has changed and sentiment levels are having a more pronounced impact on consumption behavior.
