U.S. consumer confidence at more than six-year low

U.S. consumer confidence

WASHINGTON fell to a more than six-year low in August as households worried about the labour market and incomes, casting doubts on the sustainability of the economy’s recovery from the COVID -19 pandemic.

The downbeat survey from the Conference Board on Tuesday overshadowed news that sales of new single-family homes raced to a more than 13-1/2-year high in July. The housing market continues to show strong immunity to the coronavirus crisis, though the second straight monthly decrease in consumer confidence could slow momentum.

The ebb in confidence followed the expiration of a US$600 weekly unemployment benefit supplement at the end of July and a flareup in new coronavirus cases. While new infections have subsided, hot spots remain in some parts of the country.

“Today’s data are telling us that while some lucky workers are able to buy new homes, millions of others are unable to afford life’s necessities and pay the rent especially after the federal government cancelled those $600 cheques,” said Chris Rupkey, chief economist at MUFG in New York. “The consumer is the most worried they have been all year, which pours cold water on the idea that the economic recovery is sustainable.”

The Conference Board said its consumer confidence index dropped to a reading of 84.8 this month, the lowest since May 2014, from 91.7 in July. Economists polled by Reuters had forecast the index edging up to a reading of 93 in August.