Bloomberg Consumer Comfort Index Reflects Negative Consumer Confidence
Americans’ confidence in personal finances has slumped and optimism has dipped, causing the biggest weekly downturn in consumer confidence since September 2016, according to the Bloomberg Consumer Comfort Index.
The consumer comfort measure dropped from 51.6 to 49.9. The index tracking personal finances fell to 57.1 from 60.1, which is good enough for the biggest decline since August 2016.
Confidence in the economy also took a hit, falling to 50.9 from 51.8.
Consumers were also more reluctant to buy, as the buying climate dipped from 42.8 to 41.5.
The data marks a disturbing trend among American consumers, being the fourth decline in the last five weeks following a 16-year high that peaked at the end of August. The index is now at its lowest levels since July, down 3.4 points from the peak.
American Consumer Confidence Dropping
The main driver of the weakening consumer confidence consists of mounting concerns over personal finances. Despite reaching a three-month high a week earlier, optimism in personal finances is flagging and therefore dragging the other measures with it. Concerns about the economy, gas prices following the hurricane, and political divides may all have contributed to this sudden loss in optimism among Americans.
The divide also split along gender and racial lines. Sentiment was especially negative among women, with the gauge falling to the lowest level since January regarding concern about personal finances and the economy. Male respondents, conversely, were more upbeat, which marks the widest gender gap since December 2006.
Sentiment among black respondents, however, was at its highest level since November; for Caucasians, it fell to its lowest since mid-July.
In the West, consumer confidence fell by six points to the lowest levels since July, while confidence declined among all age groups with the exception of 35- to 44-year-olds.
Consumer confidence is extremely important to the U.S. economy, as a lack of comfort in personal finances will lead to a decline in sales across the board and stunt economic growth.
The Trump administration has pegged economic growth as one of its key goals. If consumer confidence continues to wane, however, then achieving the economic growth that the White House promised will prove to be more difficult than first expected.
“U.S. Consumer Comfort Declines by Most in a Year on Finances,” Bloomberg, October 5, 2017.