The latest spike in COVID-19 infections has already slowed restaurant reservations, air travel and hotel occupancy in the United States.
US consumer confidence fell to a six-month low in August, suggesting that concerns about the delta variant and increased prices are weighing on the US view of the economy now and in the months ahead.
The Conference Board’s index fell to 113.8 from a revised reading of 125.1 in July, according to the group’s report Tuesday. Economists had called for a drop to 123 in a Bloomberg poll.
The figures suggest that the spread of the delta variant has affected consumers’ view of the economy and threatens to undermine spending on services. The latest spike in Covid-19 infections has already slowed down restaurant reservations, air travel and hotel occupancy. At the same time, Americans are paying more at the supermarket and at the gas station, which can further dampen sentiment.
Shares fluctuated after the report and government bond yields rose.
The numbers track the University of Michigan’s consumer confidence index, which plunged to its lowest level since 2011 in August as Americans became more concerned about the outlook for the economy, inflation and the recent rise in coronavirus cases.
“Concerns about the Delta variant – and, to a lesser extent, rising gas and food prices – resulted in a less favorable view of current economic conditions and near-term growth prospects,” Lynn Franco, senior director of economic indicators at the Conference Board , said in a statement.
The current state of the Conference Board fell to 147.3, the lowest level since April. Consumer perceptions of current business conditions fell, while economic expectations fell to 91.4, a seven-month low.
Consumers were less optimistic about their future income and job prospects. The proportion of consumers who said there were “enough” jobs fell slightly from a multi-decade record.
Consumers said they were slightly less likely to buy cars, homes and appliances. Vacation plans for the next six months got higher.