Friday, August 12, 2011

Consumer Sentiment declines sharply in August

by Bill McBride on 8/12/2011 09:55:00 AM

The preliminary August Reuters / University of Michigan consumer sentiment index declined sharply to 54.9 from 63.7 in July.

Consumer Sentiment
Click on graph for larger image in graphic gallery.

In general consumer sentiment is a coincident indicator and is usually impacted by employment (and the unemployment rate) and gasoline prices. However I think this month was different. I think consumer sentiment declined sharply because of the heavy coverage of the debt ceiling debate (update: this was polled before the S&P downgrade).

This was well below the consensus forecast of 63.0.

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