According to the Conference Board, its Consumer Confidence Index dropped sharply to 60.6 in August from 65.4 in July. The reading was way below consensus estimate of 66 and also its lowest level in nine months.
While the consumers’ assessment of the current condition was little changed, their outlook for the next six months regarding labor market and business conditions deteriorated in August.
The drop came as a surprise since most of housing and labor market data released recently shows slow improvement. Such a drop in consumer confidence could be bad for consumer spending which accounts for about 70% of the economy
So, what do you think is making the consumers so apprehensive? Is it the looming fiscal cliff or the upcoming elections or the recent rise in gas prices and expectation of rising food prices due to the drought? Or is it the continued uncertainty about the job markets?
Please share your thoughts.
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