Oxford Economics reports that consumer confidence has weakened as a result of concerns about the Delta variant.
It notes that in August, the Conference Board’s Consumer Confidence Index declined sharply in due to concerns about the Delta variant restraining economic growth and to a lesser degree higher inflation.
Consumers’ view of the labor market weakened only slightly; as such, the ongoing recovery in the labour market prevented a steeper drop.
Oxford Economics also pointed to the Consumer Confidence Index fell from a downwardly revised 125.1 in July (previously 129.1) to a lower-than-forecast 113.8, the weakest reading since February 2021. The present situation index faltered to 147.3 from 157.2 last month, which was 9.5 points shy of the pre-pandemic level posted in March 2020. The expectations index pulled back to 91.4 from 103.8 in July.
And it observed that the deterioration in consumers’ economic outlook underscores that the pace of consumer spending is moderating in Q3 to around 3% annualized growth after an ebullient burst in H1 of over 11% annualized.
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