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U.S. Consumer Comfort Slumps to Lowest Level Since January

A sudden downturn in American households’ optimism about the economy and less-favorable views of personal finances sent the Bloomberg Consumer Comfort Index reeling to its lowest point since January, a potentially adverse sign for spending, figures showed Thursday.

Highlights of Consumer Comfort (week ended July 9)

  • Overall measure of consumer comfort dropped to 47 from 48.5 the prior week
  • Gauge of economy declined to a seven-week low of 43.9 from 45.5
  • Personal finances gauge decreased to 56.2, the lowest since early February
  • Buying-climate measure fell to 41, matching the weakest level since January, from 42.4

Key Takeaways

The root of the biggest two-week decline in the measure of confidence about the economy since 2011 and less optimism about households’ financial well-being may lay in subdued wage growth and disappointment in Washington politics. While stocks are hovering close to record highs, sentiment weakened particularly among those making more than $50,000 a year, indicating respondents are increasingly doubtful Congress and President Donald Trump will pass economy-enhancing legislation, including tax reductions. While the post-inauguration bump in sentiment has evaporated, low inflation and cheap borrowing costs remain sources of support for consumer spending.

Other Details

  • Sentiment among those making more than $50,000 fell to the lowest since the first week of February, while sentiment for those making less rose for the third week
  • Comfort fell in the Northeast, Midwest and the West, while it increased in the South
  • Optimism fell to a five-month low among political independents, while sentiment also weakened among Republicans and Democrats
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