U.S. Consumer Sentiment Decreased in Early October -University of Michigan
By Xavier Fontdegloria
Consumer sentiment in the U.S. fell slightly in early October as
the spread of the Covid-19 Delta variant and supply-chain strains
weighed on Americans' mood.
The preliminary estimate of the index of consumer sentiment
released Friday by the University of Michigan decreased to 71.4 in
October from 72.8 in September. The reading missed estimates from
economists polled by The Wall Street Journal, who expected the
indicator to come in at 73.0.
"The Delta variant, supply-chain shortages, and reduced
labor-force-participation rates will continue to dim the pace of
consumer spending into 2022," said Richard Curtin, the survey's
Consumer confidence hints at Americans' willingness to spend on
goods and services, which is a major driver of the U.S. economy.
However, although confidence fell significantly in the last few
months due to the spread of the Covid-19 Delta variant, U.S.
consumers haven't shown signs of pulling back spending.
For the past three month, consumer sentiment has remained at the
lows first recorded in response to last year's shutdown of the
economy. In February 2020, before the Covid-19 pandemic hit the
U.S., the index stood at 101.0.
Another factor which has contributed to the more pessimistic
views from American consumers is that confidence in government
economic policies has significantly declined during the past six
months, Mr. Curtin said.
On prices, Americans' expected inflation rate for the next year
increased to 4.8% compared with a 4.6% rise in September. For the
next five years, consumers expect prices to rise 2.8%, easing from
the 3.0% registered the prior month.
"Prices remain elevated and there is a risk that a renewed
increase in prices for goods such as autos could lead to a further
worsening assessment of buying conditions for consumer goods," Citi
economist Veronica Clark said in a note ahead of the data
Consumers' assessment of the current economic conditions fell to
77.9 in October from 80.1 in September. The index of consumer
expectations--which reflects the balance of respondents
anticipating improved business conditions in the next six
months--decreased to 67.2 from 68.1 the prior month.
The final reading for the month will be published Oct. 29.
Write to Xavier Fontdegloria at email@example.com
(END) Dow Jones Newswires
October 15, 2021 10:30 ET (14:30 GMT)
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