U.S. consumer sentiment fell this month to its lowest level since March 2009, reflecting depressed income and low employment levels, a widely watched survey reported.
The Reuters/University of Michigan survey’s consumer sentiment index tumbled 7.7 points to 63.8. The index’s barometer of current economic conditions fell 5.7 points to 76.3, the lowest since November 2009. The gauge of consumer expectations fell 9 points to 55.8, the lowest since March 2009.
“This is a very bad report,” Chris Christopher, U.S. economist at IHS Global Insight, said in a commentary. “Consumer mood is at depressed levels and most of the economic news has not been favorable to consumer confidence and spending.”
He said falling gasoline prices have been insufficient to boost consumer spending and confidence, and that Washington bickering over the U.S. debt ceiling hasn’t helped.
“It is blatantly clear that the American consumer is worried and tired – this is terrible news since consumer spending represents 70 percent of the economy," Christopher said.
"Whenever the Expectations Index has been this low in the past, the economy has been in recession," survey director Richard Curtin said in a statement. “"Nonetheless, one month's data is insufficient to signal a renewed downturn, particularly if a last-minute agreement on the debt ceiling results in a partial restoration of confidence."
Retail sales rose last month, fueled by an uptick in auto sales and increases in chain-store sales that were aided by favorable weather and clearance sales.
The National Retail Federation’s Global Port Tracker this month forecast containerized imports through the largest U.S. ports would be flat through August before rising by double digits during the fall peak season for holiday imports.