U.S. consumer sentiment extended its slide in late July as the resurgent coronavirus led to renewed business closings and layoffs, adding to signs the economic recovery is stalling.
The University of Michigan’s final sentiment index for July was 72.5, compared with a preliminary reading of 73.2 and June’s final reading of 78.1, according to data Friday. The median projection in a Bloomberg survey of economists called for 72.9. The latest figure is just above the eight-year low recorded in April.
The gauge of current conditions fell 4.3 points to 82.8 and compared with the preliminary reading of 84.2, while a measure of expectations dropped to 65.9, matching the six-year low from May.
Besides the climb in virus cases, the decline in optimism highlights the precarious state of consumer finances, with lawmakers failing to reach agreement on extending the $600 in extra federal jobless benefits that have propped up incomes and spending. The survey also indicated that lower-income households are seeing higher inflation thanks to rising food prices.
“The lapse of the special jobless benefits will directly hurt the most vulnerable and spread even further by missed rent, mortgage, and other debt payments,’’ Richard Curtin, director of the survey, said in a statement.
In a special set of questions tied to the election, the survey found respondents gave an edge to President Donald Trump over Democratic challenger Joe Biden on who would be better for economic growth and personal finances, though a plurality of 42% said neither had an advantage on finances.
While there’s still a big gap in sentiment between Democrats and Republicans, both groups saw declines in consumer confidence in July, along with independents.
The Michigan survey was conducted June 24 to July 27. The cutoff for the preliminary results was July 15.
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