Americans in August felt no better about the economy than about their own financial situation than they did in the previous month, reflecting broad concerns about the still-spreading coronavirus and the chance of a slow recovery, emerged from a new survey.
The preliminary reading of the consumer sentiment survey in August runs to 72.8 from 72.5 in July, but it is still just barely above the lowest pandemic, the University of Michigan said Friday.
Americans regained some confidence in the early stages of recovery in May and early June, but their hopes of a rapid rebound were dampened by a fresh outbreak of the coronavirus in the summer.
To read:Retail sales are climbing again and going back to precision levels, but growth is slowing as incentives decline
What happened: Consumers express low confidence in the current state of the economy. An index that currently measures attitudes slipped to 82.5 from 82.8.
An index that measures expectations for the next six months measures slightly higher to 66.5 from 65.9. Yet most Americans think it will take years before the economy returns to normal.
“Bad economic times are expected to persist not only in the coming year, but the majority of consumers do not expect a return in the next five years to a period of uninterrupted growth,” said Richard Curtin, the chief economist. the sentiment research.
Curtin said the political deadline in Washington is to restore the recently expired $ 600 federal benefit to the unemployed and other measures to help the economy have forced households to save more and left them increasingly uncertain about what lies ahead.
To read:‘A massive welfare economy’ – federal aid prevents even steeper GDP collapse
The big picture: The amount of confidence that Americans have in the economy and their own financial security holds a good record of predicting the future. Until they feel safer, the economy is unlikely to make a rapid recovery.
What could help restore some confidence are Washington’s further measures to support the economy. President Trump has temporarily ordered a $ 300 federal support grant for the unemployed, but the money will run out by the end of September.
So far, the two parties remain far apart over the next incentive package, with both sides posting and seeking political advantage for the pivotal elections in 2020.
To read: Did the expired benefit of $ 600 federally unemployed people not keep working back?
What are they saying? “Consumer sentiment remains volatile and has not recovered from the sharp drop in the spring,” said Robert Frick, business economist at Navy Federal Credit Union.
“In the absence of another round of fiscal support, consumer attitudes are likely to be more cautious, which could limit spending and the pace of recovery going forward,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.
To read: Unemployed claims fall below 1 million for the first time since the onset of coronavirus pandemic
Brand Response: The Dow Jones Industrial Average DJIA,
and S&P 500 SPX,
were hesitant in trading Friday morning. The stocks have grown in fit and start over the past few weeks.
.
