The latest rise in COVID-19 infections has already limited restaurant reservations in the United States, travel to airlines and hotel occupancy.
U.S. consumer confidence fell to a six-month low in August, indicating that concerns about the delta variant and rising prices outweigh Americans’ views of the economy now and in the coming months.
The conference council’s index fell to 113.8 from a revised 125.1 reading in July, according to the group’s report on Tuesday. Economists in a Bloomberg survey demanded a decline to 123.
The figures suggest that the spread of the delta variant has hurt consumers’ view of the economy and threatens to undermine spending on services. The latest rise in Covid-19 infections has already dampened restaurant bookings, airlines and hotel occupancy. At the same time, Americans are paying more at the grocery store and at the gas station, which could possibly weigh more sentiment.
Shares fluctuated following the report and Treasury yields rose higher.
The figures follow the University of Michigan’s consumer sentiment index, which fell to its lowest level since 2011 in August as Americans became more concerned about the outlook for the economy, inflation and the recent increase in coronavirus cases.
“Concerns about the Delta variant — and, to a lesser extent, rising gas and food prices — have led to a less favorable view of current economic conditions and short-term growth prospects,” said Lynn Franco, senior director of economic indicators at the conference council, said in a statement.
The current state of the conference board dropped to 147.3, the lowest reading since April. Consumers’ views of current business conditions declined, while economic expectations fell to 91.4, a seven-month low.
Consumers were less excited about their future income and job prospects. The share of consumers who say jobs are ‘plentiful’ has declined slightly from a multi-decade high.
Consumers said they were somewhat less likely to buy cars, homes and appliances. Holiday plans for the next six months have risen higher.