The Conference Board reported Tuesday that its consumer confidence index dropped to a reading of 113.8 in August, down from a revised 125.1 in July. It was the lowest level for the index since a reading of 95.2 in February.
The July index was revised from down from an initially reported 129.1 which followed a reading of 128.9 in June, the best showing since before the pandemic struck in February 2020.
The Conference Board said that concerns about the resurgence in COVID cases as well as worries about rising gas and food prices had contributed to the drop.
With the August decline, the overall index is 19 points below its pre-pandemic level. The drop in August reflected a weakening in both the current conditions and expectations components of the index.
The report showed that spending intentions for purchases of homes, autos and major appliances cooled in August, but the percentage of consumers intending to take a vacation in the next six months continued to climb.
“While the resurgence of COVID-19 and inflation concerns have dampened confidence, it is too soon to conclude this decline will result in consumers significantly curtailing their spending in the months ahead,” said Lynn Franco, senior director of economic indicators for the Conference Board.
The decline in the Conference Board’s monthly consumer confidence gauge follow a sharp fall reported Friday in the reading from the University of Michigan’s consumer sentiment survey.
Kathy Bostjancic, chief U.S. financial economist for Oxford Economics, said the declines in consumer sentiment were occurring at a time when consumer spending has slowed from the sizzling gains seen in the first six months of the year.
But many analysts said they still expect further gains in consumer spending in the coming months, given the high levels of savings households have currently.
“Americans overall are flush with cash and eager to spend it as the economy reopens,” said Robert Frick, corporate economist with Navy Federal Credit Union.
Adapted from reporting by the Associated Press.