Consumer sentiment drops amid economic stress
YONKERS, N.Y. — Consumer Reports announced that its index, which measures overall consumer sentiment, fell to its lowest level since December 2009 and registered its sharpest drop in two years, as recent events in Washington about the debt ceiling debate fixed attention on the weak economy.
"The debt ceiling debate in Washington focused the consumer's attention fully on the dire state of the economy, leaving many in a dispirited mood," said Ed Farrell, director of the Consumer Reports National Research Center. "Americans are facing real financial difficulties due to weak employment, which is a key impediment to an economic recovery. This is reflected in nearly every measure of the consumer's experience."
The Consumer Reports index fell to 43.4, down sharply from 48.5 last month. The figure represents the percentage of people saying they were financially better off versus worse off than they were a year ago.
The Consumer Reports Trouble Tracker, a gauge of the breadth and depth of financial difficulties among American households, jumped 10 points to 60.6 in August, reflecting financial difficulties pertaining to health care and an inability to pay mortgages and other bills. The Employment Index fell to its lowest level since March 2010 and slid sharply, as more jobs were lost than created.
"The Consumer Reports index shows no clear signs pointing to an economic recovery any time soon," Farrell said. "Too many households are feeling financial pain and more jobs were lost than created. Unfortunately, the burden of this bad economy has fallen on the households that earn less than $50,000 a year. They're the ones having trouble finding new jobs, paying bills and affording health care."