New York – U.S. consumers' confidence in the progress of the nation's economy and of their own financial situation plunged in August to its lowest point since May 1980 over worries about the faltering recovery, according to survey results released Friday.
The Thomson Reuters/University of Michigan's preliminary August reading on overall consumer sentiment stands at 54.9 points, considerably lower than the 63.7 in July and also far from the expectations of analysts, who believed the index would be around 63.
The figures are the lowest in more than three decades, a result of a series of factors including high unemployment rates, a long debate in Congress over raising the debt limit and the downgrading of the U.S. debt by Standard & Poor's, Reuters/UMich said.
"Never before in the history of the surveys have so many consumers spontaneously mentioned negative aspects of the government's role," survey director Richard Curtin said.
By July the index had already retreated significantly, from 71.5 points to 63.7, which at the time was its lowest level since March 2009 and was largely due to the lack of an agreement between Republicans and Democrats to raise the debt ceiling, which was finally approved at the last minute a week ago.
Worries were further heightened this month by the downgrading of the U.S. debt rating, which combined with other structural factors sank consumer confidence to depths unknown in more than 30 years.
And the subindex that measures consumer expectations about how the economy will fare in a year's time fell in August to 45.7 points compared with 56 points in July and reached its lowest level since May 1980.
For its part, the index that measures consumers' perception of current economic conditions and their readiness to make large purchases dropped from 75.8 points in July to 69.3 points this month.