The numbers: Consumer confidence swooned in July amid a rash of latest coronavirus circumstances in many U.S. states, signaling a rockier economic recovery in the months forward.
The index of shopper confidence fell to 92.6 this month from a revised 98.3 in June, the Conference Board said Tuesday. Economists polled by MarketWatch had anticipated a studying of 96.0.
The stage of confidence remains to be above its pandemic low of 85.7, but it surely’s probably to be a very long time earlier than it returns to its pre-crisis peak. The index stood close to a 20-year excessive at 132.6 in February earlier than the pandemic struck.
The financial system is just not anticipated to make a full recovery for at the least a 12 months or two.
“Consumers have grown less optimistic about the short-term outlook for the economy and labor market and remain subdued about their financial prospects,” mentioned Lynn Franco, senior director of economic indicators on the board. “Such uncertainty about the short-term future does not bode well for the recovery, nor for consumer spending.”
What occurred: An index that gauges how customers really feel in regards to the financial system proper now truly rose to 94.2 in July from 86.7. Massive federal help and different measures to prop up the financial system have helped stave off worse monetary straits for million of Americans already struggling to get by. More than 30 million persons are receiving unemployment advantages.
Yet Americans have gotten extra pessimistic in regards to the close to future. Another gauge that assesses how Americans view the following six months — the so-called future expectations index —sank to a four-month low 91.5 from 106.1 in June.
Congress is weighing a brand new financial-relief invoice this week, however the final result is unclear and it’s doable that emergency unemployment advantages may very well be diminished. Washington has kicked in up to $600 in additional advantages for jobless Americans on high of what state plans pay, however the measure ends July 31.
Big image: Hopes for a fast economic recovery from the coronavirus have been dashed by an explosion in new circumstances in Texas, California, Florida and different hotspots. The financial system is probably going to undergo common ups and downs till the virus is introduced beneath management once more or a therapy is found.
What they’re saying? “American consumers lost confidence in July amidst the acceleration in new virus cases,” mentioned economist Katherine Judge at CIBC Economics. “This data suggests that the recovery has shifted into a lower gear, as consumers became more cautious about the outlook as virus cases continued to escalate.”
Market response: The Dow Jones Industrial Average
and S&P 500 index
fell in Tuesday trades.