For August, Consumer confidence plunged to 44.5 from 59.2 in July and expectations around 50.
Why are consumers so gloomy? Sure the debt ceiling debate and the downgrade of US debt was depressing to watch but it didn't impact any jobs. Nor did it impact the future of the US with interest rates dropping after the downgrade.
Maybe all this explains why retail sales continue to rise while sentiment plunges. Consumers might feel gloomy due to the news, but it appears to be sending them to the shopping mall to cure their depressions. Also, the lack of over spending on housing probably leaves more money in consumer wallets for other items such as shoes.
- "Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook," said , director of in a statement.
- said Tuesday that its Consumer Confidence Index fell to 44.5, down from a revised 59.2 in July. The number was the lowest level since April 2009 when the reading was 40.8. It also is far below the 53.3 that analysts had expected. A reading above 90 indicates the economy is on solid footing; above 100 signals strong growth.
- As a result, one gauge of the index that measures how shoppers feel about the economy dropped to 33.3 from 35.7. Another measure that assesses shoppers' outlook over the next six months fell to 51.9, down from 74.9 last month.