U.S. Consumer Sentiment Declines to Lowest in Almost a Year
(Bloomberg) -- U.S. consumer sentiment unexpectedly fell to the lowest level in almost a year amid less favorable views on purchasing big-ticket items and persistent concerns about trade tensions, a University of Michigan report showed Friday.
Highlights of Michigan Sentiment (Aug., Preliminary)
Consumers showed a broad drop in confidence about major purchases, a possible caution signal for spending following strong gains in the second quarter, with the decline in the main sentiment gauge concentrated among households in the bottom third of incomes. Buying conditions for large household durable goods slipped to the lowest level in almost four years, vehicle-buying views were the least favorable since 2013, and home-buying conditions were seen less favorably than any time in about a decade.
Respondents also continued to express concern about how trade tensions may affect the economy. Negative references to levies remained widespread, with 32 percent citing unfavorable references to the trade policy in early August, according to the report, following 35 percent in July.
The decline in the Michigan gauge compares with more-favorable sentiment figures in recent releases on the Bloomberg Consumer Comfort Index and the Conference Board’s confidence measure.
“Consumers voiced the least favorable views on pricing for household durables in nearly ten years,” Richard Curtin, director of the University of Michigan consumer survey, said in a statement. “The recent favorable GDP report had only a small positive impact on growth prospects for the economy and on unemployment expectations.”
Consumers are realizing the trade situation may prove to be “a long, drawn-out affair,” Curtin said in a conference call following the release of the report.