In a move that surprised most economists consumer confidence fell to its lowest level since Nov. 2011, a report released Wednesday shows. According to Bloomberg, the increasing pessimism amongst U.S. households can be attributed to rising gas prices, an unemployment rate that is stuck above 8%, and limited income gains.
The Conference Board’s Consumer Confidence Index dropped from 65.4 in July to 60.6 in August. Many economists had expected a reading of 66. A prolonged pessimistic outlook increases the risk of a decline in consumer spending, which accounts for nearly 70% of the US economy.
Despite increasing apprehension about business and employment prospects, consumers are more optimistic about business and employment prospects, reported Forbes.