Consumer confidence dropped dramatically in August, according to the latest index released by Reuters and the University of Michigan. The metric places consumer sentiment at 83.3, the lowest reading of the year, and well below the predicted 88.0. It may be a sign that chaos on Wall Street is affecting normal Americans, analysts say.
The index, which is compiled from household surveys, had been optimistic in July, returning a figure of 90.4. August also showed a precipitous drop in overall economic conditions. The data comes hot on the heels of the Federal Reserve’s decision to drop its primary discount rate by a half-point, and may help spur the Fed to cut interest rates next month or earlier.