Lack of Confidence in Government Stifles Consumer Sentiment Recovery

by Robert Hughes
The American Institute for Economic Research

The preliminary August results from the University of Michigan Surveys of Consumers show overall consumer sentiment was roughly unchanged in early August and remains well below pre-lockdown levels. A lack of confidence in government policies was a key theme driving the weak results.

Overall consumer sentiment increased slightly to 72.8 in early August, up from 72.5 in July, a 0.4 percent rise (see chart). From a year ago, the index is still down 18.9 percent. The sub-indexes posted opposing changes in early August. The current-economic-conditions index fell to 82.5 from 82.8 in July (see chart). That is a 0.4 percent drop and leaves the index with a 21.7 percent decrease from August 2019.

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