Consumer Sentiment was 70.3 in August according to the University of Michigan Consumer Sentiment Index. August’s figure was 10.9 points lower than the July reading and is 3.8 points below the August 2020 index. The Current Economic Conditions Index fell 6.0 points from the previous month to 78.5 and is 4.4 points below the August 2020 index. The Consumer Expectations Index declined 13.9 points to 65.1 and is 3.4 points lower from a year ago.
“The August collapse of confidence does not imply an imminent downturn in the economy. There was a similar episode which occurred in September 2005, with comparable declines in the Sentiment Index (13.7% in 2005 vs. 13.4% in 2021). The cause of the steep falloff in 2005 was the devastation from hurricane Katrina and rising energy prices. The impact of 9/11 was another non-economic event that had an immediate impact on consumers’ expectations and emotions. Although economic expectations began to improve by year-end, the emotional impact on spending patterns lasted for a much longer time. That same type of persistent impact on spending patterns is now likely to reoccur.” said Richard Curtin, chief economist of UM Surveys of Consumers.
Read the University of Michigan Surveys of Consumers release.