US consumer confidence hit hard by rise of Covid-19 Delta variant

The appearance of the Delta variant of Covid-19 hammered Americans's confidence at the start of August, the results of a closely-followed survey revealed.

Preliminary data showed a drop in the University of Michigan's consumer confidence index from 81.2 at the end of July to 70.2 in early August.

Economists had anticipated an unchanged reading.

Richard Curtin, the survey's director, described the fall as "stunning".

The 13.5% drop was the seventh largest decline in the survey's history, with the other larger drops having occured either in April 2020 (-19.4%) or during the worst moments of the Great Recession (-18.1%) in October 2008, Curtin noted.

August's losses were widespread by income, age and education subgroups, as well as by regions, and covered all aspects of the economy.

Nevertheless, said Curtin: "Consumers have correctly reasoned that the economy's performance will be diminished over the next several months [...]

"In the months ahead, it is likely that consumers will again voice more reasonable expectations, and with control of the Delta variant, shift toward outright optimism. Consumers' reaction to Delta's modestly higher precautionary measures indicates the difficulty of producing optimal policy responses."