US University of Michigan consumer sentiment dropped sharply to 95.3 in August, down from 97.9 and missed expectation of 98.1. That’s also the lowest level since last September.
Some quotes from Surveys of Consumers chief economist, Richard Curtin:
- Decline concentrated among households in the bottom third of the income distribution
- The dominating weakness reflected much less favorable assessments of buying conditions, mainly due to less favorable perceptions of market prices.
- Consumers have become much more sensitive to even relatively low inflation rates than in past decades.
- Some price resistance has been neutralized by rising wages
- Falloff in favorable price perceptions has been much larger than ever before recorded.
- Overall, the data indicate that consumers have little tolerance for overshooting inflation targets, and to the benefit of the Fed, interest rates now play a more decisive role in purchase decisions.
