U.S. consumer sentiment worse than initially estimated in July

The final reading for the July Reuters/Michigan index of consumer sentiment came in at 72.5 compared to a preliminary reading of 73.2 and the June final reading of 78.1.

Economists had forecast the index to be revised down to 73.0.

According to the report, the index of the current economic conditions fell 4.9 percent m-o-m to 82.8 from June’s final reading of 87.1.

Meanwhile, the index of consumer expectations plunged 8.9 percent m-o-m to 65.9 from June’s final reading of 72.3.

Richard Curtin, the Surveys of Consumers chief economist, noted that consumer sentiment sank further in late July due to the continued resurgence of the coronavirus, and the expectations measure provided no indication that consumers expect the recession to end anytime soon. “While the 3rd quarter GDP is likely to improve over the record setting 2nd quarter plunge, it is unlikely that consumers will conclude that the recession is anywhere near over,” he added. “The lapse of the special jobless benefits will directly hurt the most vulnerable and spread even further by missed rent, mortgage, and other debt payments. Easing off the added jobless benefit will naturally result with job growth as well as provide for a delayed and gradual reduction in added benefits so that its eventual absence is much less disruptive.”