In the US, the Conference Board Consumer Confidence Index weakened in August, falling to 113.8 from 125.1 in July (revised from 129.1). Although this reading is below all estimates, it reflected the partial slowdown momentum in the economy within the framework of the trends in the lower readings, which can be weighted especially due to the Delta variant.
If we look at the sub-details of the index; The Current Situation Index, based on consumers' assessment of current business and labor market conditions, dropped to 147.3 in August from the revised 157.2 levels in July. The Expectation Index, based on consumers' short-term outlook for income, jobs and labor market conditions, dropped to 91.4 from 103.8.
Recent data that has slowed the recovery momentum after hitting 95.2 in February 2021 reveals a decline somewhat similar to the pioneering Michigan index published two weeks ago. However, the reality in the economy and the concerns of consumers may not be in line. Therefore, we need to be sure to what extent we are concerned about the risks of the economy when revealing behaviors that affect consumer shyness or expectations. In order to foresee the long-term effects of economic slowdown, particularly the delta variant risk, which may hinder short-term spending habits, it needs to become more evident. However, as employment recovers, the income effect is now increasing. On the other hand, individuals may also worry that their income may decrease, for fear of reclosure. Behaviors such as acquiring a house, automobile and household goods will be affected by this. It should also take into account that inflation concerns may shave off revenues, but concerns here will remain milder as inflation is expected to decline in the long run. In part, however, growth may lose some momentum, with more substantial evidence still needed to determine whether this will be a slowdown in acceleration or a slowdown to be concerned about. The data is still rough, but the net confirms the growth.
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