Joseph Bonney | Aug 26, 2011 1:18PM EDT
U.S. consumer sentiment hit its lowest level since November 2008, a decline aggravated by political battles in Washington, according to a survey.
The Thomson Reuters/University of Michigan's consumer sentiment index posted a final August reading of 55.7, up from a mid-August preliminary reading of 54.9 but down from 63.7 the month before.
"Consumers have shifted from being optimistic about the potential impact of monetary and fiscal policies to a sense of despair and pessimism about the role of the government," said survey director Richard Curtin.
“This is a bad report. No positive spin is possible. Consumers are fragile, fatigued and fed up,” said Chris G. Christopher Jr., senior principal economist at IHS Global Insight.
Consumer spending accounts for 70 percent of U.S. economic activity and a large portion of U.S. containerized imports volume. Journal of Commerce Economist Mario O. Moreno forecasts containerized imports will rise or fall no more than 1 percent in the current quarter andrise by 2.5 to 3.5 percent in the fourth quarter.
The Michigan survey suggested the impact of the federal budget squabble on consumer sentiment. Spontaneous negative references to the government were made by 25 percent of respondents, above the prior record of 20 percent in April 2010.
The survey's barometer of current economic conditions was 68.7, down from 75.8 in July and below a forecast of 69.3. The component is at its lowest level since August 2009, just after the official end of the recession. The outlook also worsened, with the gauge of consumer expectations falling to 47.4from July's final reading of 56.0, but above an expected 45.7.
-- Contact Joseph Bonney at jbonney@joc.com. Follow him on Twitter @josephbonney.
