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U.S. consumer confidence has fallen to its lowest level in more than nine years, as an increase in the number of new Covid-19 cases has weakened Americans’ prospects for the economy and their personal finances.

The University of Michigan consumer confidence index fell to 70.2 in August, its lowest level since December 2011, according to a poll released Friday. The month-over-month decline fell below economists’ expectations for the index to match its July reading of 81.2.

Richard Curtin, chief economist for the university’s consumer surveys, called the drop a “staggering loss of confidence” as Americans respond to a resurgence in coronavirus cases and hospitalizations attributed to the spread of the variant Delta.

“Consumers have rightly reasoned that the performance of the economy will be diminished over the next few months, but the extraordinary increase in negative economic assessments also reflects an emotional response, mainly due to disappointed hopes that the pandemic would end soon.” , Curtin said.

Previously, the pandemic index’s lowest reading was 71.8 in April 2020.

Andrew Hunter, senior US economist at Capital Economics, warned that worsening optimism in August could be a sign that the current wave of Covid-19 infections “could be a bigger drag on the economy than we are. had thought so “.

“With the fiscal stimulus now well gone and soaring prices starting to hit real incomes, weaker confidence is another reason to expect a sharp slowdown in consumption growth in the coming months,” Hunter added.

Navy Federal Credit Union business economist Robert Frick noted that the closures and layoffs seen earlier in the pandemic are still unlikely to occur. “But the Delta wave is an unknown, and just like inflation expectations, uncertainty shakes confidence but is unlikely to shake spending,” he said.

Consumers have reported less confidence in current economic conditions, while their outlook for the future has deteriorated markedly as long-term inflation expectations worsen. The survey found that consumers expected inflation of 3 percent over the next five years, up from 2.8 percent in July.

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