US consumer confidence falls unexpectedly
Consumer confidence to spend in the US fell unexpectedly in August, according to a survey by Reuters and the University of Michigan.
The consumer sentiment index was 80.0 in August, down from 85.1 in July, when the index rose to its highest point in six years. Analysts had expected to see a further rise to 85.5.
The index is still nevertheless at a high point. Amna Asaf, economist at Capital Economics, says sentiment was probably dampened this month by rising long-term interest rates, despite falling petrol prices.
Moreover, the survey sample period predates the most recent slide in stock markets. (The survey period usually ends on the Wednesday before the Friday release.)
The expectations index, which usually mirrors movements in gasoline, interest rates and equity prices, fell to a four-month low of 91.0, from 98.6.
The current conditions index also fell, but a bit more modestly, to 72.9, from 76.5. This index is normally driven by labour market conditions which, based on the latest dip in initial jobless claims to a six-year low, appear to be gradually improving.
Based on the historical relationship, the expectations index still suggests that third-quarter consumption growth will be better than second-quarter's 1.8% annualised, possibly close to a 2.5% gain.