What Gives? Sales Up, But Consumer Sentiment Down

U.S. consumer confidence dipped slightly in August, according to preliminary results from the University of Michigan’s Survey of Consumers index of sentiment. 

The index dipped to a score of 92.9 in August, which was down slightly from July‘s figure of 93.1. According to a Bloomberg survey of economists, that index score was forecasted to bump to 93.5, but early survey results showed that isn’t expected to happen. 

“Now is the time to more carefully monitor consumer sentiment in case we do see a fallout from the international problems, but I don’t expect it,” Richard Curtin, director of the Michigan Survey of Consumers, told Bloomberg. He also noted that lower prices are “starting to have an impact on their spending decisions because they now no longer expect gas prices to quickly rebound to the previous levels.”

While Americans are still wary of the economy, that doesn’t mean that consumer spending has dipped. In fact, Bloomberg’s report points out that retail sales increased 0.6 percent in July, and the Commerce Department recently revised the previous two months’ reports to be higher, too. This has been attributed to employment rates rising as the job market continues to improve. In fact, the July unemployment rate hit a seven-year low of 5.3 percent.

Curtin also explained why consumer sentiment remained lower, while spending saw a slight increase.

“Renewed strength in personal finances largely offset slight declines in prospects for the national economy and buying conditions. The declines in prospects for the economy probably reflect the expected increases in interest rates, while the eventual but small impacts from falling commodity prices, the devaluation of the renminbi and a weaker global economy have yet to occur (other than from declines in oil prices),” Curtin wrote in a note about the early results of the sentiment survey. 

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