Consumer confidence plummeted to 44.5, the lowest number since April 2009 and not far above record lows.
Markets were expecting 51.9, a big decline from 59.5 but not this dramatic. The Dow dropped sharply after the release, now off 0.9% for the day.
People may have been terrified by the volatile stock market. Also the debt ceiling debate, the S&P downgrade and a growing sense of economic stagnation.
Consumers’ appraisal of present-day conditions weakened further in August. Consumers claiming business conditions are “bad” increased to 40.6 per cent from 38.7 per cent, while those claiming business conditions are “good” inched up to 13.7 per cent from 13.5 per cent. Consumers’ assessment of employment conditions was more pessimistic than last month. Those claiming jobs are “hard to get” increased to 49.1 per cent from 44.8 per cent, while those stating jobs are “plentiful” declined to 4.7 per cent from 5.1 per cent.
Consumers’ short-term outlook deteriorated sharply in August. Those expecting business conditions to improve over the next six months decreased to 11.8 per cent from 17.9 per cent, while those expecting business conditions to worsen surged to 24.6 per cent from 16.1 per cent. Consumers were also more pessimistic about the outlook for the job market. Those anticipating more jobs in the months ahead decreased to 11.4 per cent from 16.9 per cent, while those expecting fewer jobs increased to 31.5 per cent from 22.2 per cent. The proportion of consumers anticipating an increase in their incomes declined to 14.3 per cent from 15.9 per cent.
Here’s a chart through July (this month’s plunge not included):