Consumer Sentiment Rose 0.4% in Early August
Ann Arbor, MI, August 14, 2020-Consumer sentiment rose 0.4% to 72.8 in early August, according to preliminary results from the University of Michigan Survey of Consumers.
This represents a 18.9% decline year over year.
“Consumer sentiment remained largely unchanged in early August from the July reading (+0.3 points) or the April low (+1.0),” according to Survey of Consumer chief economist Richard Curtin. “Two significant changes since April have been that consumers have become more pessimistic about the five-year economic outlook (-18 points) and more optimistic about buying conditions (+21). Lower interest rates by the Fed prompted more favorable buying, especially for homes, and the DC policy gridlock was responsible for the weaker outlook. The overall confidence in economic policies fell to the lowest level since Trump first entered office (see the chart). The policy gridlock has acted to increase uncertainty and heightened the need for precautionary funds to offset lapses in economic relief programs and to hedge against fears about the persistence and spread of the coronavirus as the school year gets underway. Bad economic times are anticipated to persist not only during the year ahead, but the majority of consumers expect no return to a period of uninterrupted growth over the next five years. Consumers anticipate declines in the national unemployment rate to significantly slow and expect a rising rate of inflation during the year ahead. While a positive growth rate in consumption is anticipated in the 2nd half of 2020, it will hardly herald the end of the coronavirus recession.”