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US Consumer Confidence Hits 16-Month Low

Business owners aren't the only ones unsure about the future of the economy. The Conference Board's U.S. consumer confidence index fell to its lowest level in 16 months, dropping to 98.7, the Associated Press reported. And the expectations index, based on a six-month outlook for income, business and labor market conditions dropped to 66.4—its lowest level since 2013.

"Consumers' grimmer outlook was driven by increasing concerns about inflation, in particular rising gas and food prices," Lynn Franco, the Conference Board's senior director of economic indicators, told the AP. "Expectations have now fallen well below a reading of 80, suggesting weaker growth in the second half of 2022 as well as growing risk of recession by year end."

As most companies understand, most everything in global trade starts with the consumer. So, the fact that consumer confidence is tumbling means trouble is likely ahead for the economy. "Strong consumer demand has undergirded the robust recovery in the world's largest economy from the Covid-19 downturn, but families are now feeling squeezed by painful price increases for housing, gasoline and food, worsened by the fallout from the Russian invasion of Ukraine," reads an article from Barron's.

It is clear that consumers are now starting to feel the sting of rising costs that producers have been forced to pass downstream. The Labor Department's producer price index, which measures inflation on a business level, surged 10.8% in May year over year. "The Conference Board's survey showed that consumers grew more pessimistic about short-term business conditions, the job market and their own short-term financial prospects," the AP article reads. 

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Monday, 15 August 2022