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August US Consumer Confidence Lowest in 6 Months

Confidence among U.S. consumers dropped in August to its lowest level since February as the COVID-19 delta variant continued its spread and higher inflation rates loomed as a possibility.

The Conference Board’s consumer confidence index on Tuesday (Aug. 31) plummeted to 113.8 in August, down from 125.1 in July and lower than any month since 95.2 in February. The index hit 128.9 in June 2021, the highest level since the coronavirus pandemic began in February 2020. The resurgence in COVID-19 cases and increased gas and food prices were factors in this month’s dip.

Consumer spending intentions for the purchases of homes, vehicles and major appliances dipped in August, but the percentage of consumers planning vacations within the next six months is up this month.

“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,” Lynn Franco, senior director of economic indicators for The Conference Board, said in the announcement.

The University of Michigan’s consumer sentiment survey also fell sharply in August.

Related: Consumer Anxieties Pull Holiday Shopping Into Back-To-School Season

That dropping confidence is also altering consumers’ shopping patterns and timelines. Last year’s delayed shipping, ongoing supply chain constraints and rising inflation are leading consumers to focus on their holiday shopping early this year.

Last month, Salesforce projected that costs across the retail supply chain will increase by over $200 billion in the second half of 2021. The U.S. Labor Department cited an increase of 5.4 percent inflation in the second quarter, Salesforce’s Shopping Index indicates the average selling price in the retail sector rose 11 percent year-over-year.

PYMNTS research, in collaboration with LendingClub, found that 54 percent of adult U.S. consumers, or 124 million people, report living paycheck-to-paycheck, including 43 million millennials.

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