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August 25, 2020 11:00 AM, EDT

US Consumer Confidence Slumps to Six-Year Low on Job Views

Customers leave a New York shopping mall with bags in tow.Customers leave a Syracuse, N.Y., shopping mall with bags in tow on July 10. (Maranie Staab/Bloomberg News)

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U.S. consumer confidence dropped in August to the lowest since 2014 as consumers soured on employment and business conditions, indicating Americans are becoming despondent amid persistently high joblessness.

The Conference Board’s index decreased to 84.8 from a revised 91.7 in the prior month, undercutting the previous pandemic low of 85.7 in April, according to a report issued Aug. 25. The median estimate of economists surveyed by Bloomberg called for a reading of 93 in August. The group’s gauge of expectations fell 3.7 points to 85.2, the lowest since 2016, while household sentiment about current conditions dropped 11.7 points to 84.2.

The report points to a bumpy economic recovery — and risks for President Donald Trump’s reelection — as Americans grapple with high unemployment and uncertainty about future federal stimulus, with a new version of jobless aid just starting to reach Americans. The confidence gauge also remains well below pre-crisis levels, illustrating the depth of the economic hole created by the pandemic.

“Consumer spending has rebounded in recent months but increasing concerns amongst consumers about the economic outlook and their financial well-being will likely cause spending to cool in the months ahead,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement.

Conference Board gauge drops to lowest level since 2014.

In fact, respondents indicated they were less likely to make big purchases in the months ahead: the share expecting to buy major appliances fell to 44.8%, the lowest since 2015, while those planning to buy a car dropped to 9.7%, the second-lowest since 2010.

U.S. stocks swung between gains and losses after the report, while yields on 10-year Treasuries briefly fell before rising again. Other data Aug. 25 were more upbeat: New home sales jumped to the highest since 2006, while a regional measure of manufacturing was the strongest in almost two years.

The share of consumers saying jobs are hard to get jumped to 25.2% from 20.1%. About 30% of consumers said they expect better economic conditions six months from now, down from 31.6% in July.

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