Consumer Sentiment Fell in August

Consumer confidence fell to 91.9 in August, down 1.2 points from the previous month according to the University of Michigan Consumer Sentiment Index. The index is currently 11.4 percent higher than in August of 2014, but recent volatility in the stock market may affect sentiment in the near future.

“The Black Mondays of October 17, 1987 and August 24, 2015 represent two episodes where the stock market declined due to reasons other than the domestic economy,” says Richard Curtin, Chief Economist for UM Surveys of Consumers. “Prior to each stock decline, the Sentiment Index was very positive, but immediately following, it fell about 10 percent. Consumers quickly dismissed the 1987 episode since it didn’t involve their jobs or incomes, and today’s consumers hold similar favorable views about their job and income prospects.”

The Current Economic Conditions index fell 2.1 points to 105.1, but was 5 percent higher than August of last year, while the Index of Consumer Expectations dropped 0.7 points to 83.4, but grew 17 percent year over year.