Consumer Confidence Falls in August

Consumer sentiment fell short of the initial August readings, landing at 96.8, down from the preliminary reading of 97.6, according to the University of Michigan gauge released on Friday, September 1.

Consumer confidence is considered by many economists to be the backbone of the economy, as it usually predicts spending, and therefore how much cash will be injected into the economy.

Consumers’ views on current conditions also fell compared to July, with the final reading in August showing 110.9, down from 113.4 in July. Conversely, expectations rose from 80.5 to 87.7, creating a potentially tricky situation for the government moving forward, as consumers expect more and yet are skittish about the economy.

Consumer confidence can often be affected by all manner of things, from political strife at home to conflicts abroad to prices at the grocery store. In fact, one of the researchers at the University of Michigan was surprised that the growing division in American politics and society–exemplified by the recent events in Charlottesville–did not have a greater affect on consumers.


Hurricane Harvey will likely impact future consumer spending and confidence, as gas prices are likely to rise as a result of the massive storm that is devastating many parts of Southern Texas.

The growing political divide in government may also harm consumer spending moving forward, as threats of a government shutdown have been made by President Donald Trump should the upcoming budget not allocate funds for the building of his highly controversial border wall.

All in all, consumer confidence needs to remain high in order to encourage consumer spending and help invigorate the economy with an influx of cash. But with political division, social conflict, threats from abroad, and natural disasters pummelling the U.S. in August, there’s a chance that consumers may be more reluctant to spend as times continue to grow more and more uncertain.


Consumer sentiment retreats in late August,” MarketWatch, September 1, 2017.