Consumer confidence fell for the second-straight month in August to its lowest level in six years as Americans worry about the fragile economic recovery and an uncertain job market.
A survey that measures how Americans feel about current economic and business conditions, conducted by the nonprofit research group The Conference Board, came in at its lowest level since 2014, and was worse than economists expected.
Even though consumer spending, which accounts for some two-thirds of the US economy, has bounced back, some economists worry renewed fears could once again stifle spending.
Of those surveyed, about 25% said that jobs are “hard to get,” and less than 13% of consumers expect an increase in their incomes in the short term.
“This signals that consumers, in the face of still-high virus cases and signs of slowing employment opportunities, are becoming more cautious in their view of the continued healing of the economy,” wrote Kathy Bostjancic, chief US financial economist at Oxford Economics in a note to clients.
Between July and August, consumers’ views of the current and future business and labor market conditions worsened. So what changed in that time period?
The US economy continued to add jobs that vanished during the peak of the pandemic lockdown —1.8 million in July — and economists predict another 1.6 million new jobs added in August. But at 10.2%, the unemployment rate remains higher than it was during the peak of the Great Recession.
In addition, the federal boost of $600 to weekly unemployment benefits dried up at the end of July, leaving millions of Americans struggling to make ends meet.
After Congress couldn’t agree on a new stimulus package and an extension of the supplemental benefits, President Donald Trump signed an executive order to divert funding from the Federal Emergency Management Agency to pay for additional weekly benefits worth $300. States can add another $100 themselves, but many have said they can’t afford to do so.
Analysts at Goldman Sachs (GS) have called the executive order “too little too late”.
— Katie Lobosco contributed to this story.