Consumer sentiment in the U.S. deteriorated by more than initially estimated in the month of July, according to a report released by the University of Michigan on Friday.
The report said the consumer sentiment index for July was downwardly revised to 72.5 from the preliminary reading of 73.2. The index is down from 78.1 in June and below economist estimates for a reading of 73.0.
“Consumer sentiment sank further in late July due to the continued resurgence of the coronavirus,” said Surveys of Consumers chief economist Richard Curtin.
The decrease by the headline index was partly due to a drop by the index of consumer expectations, which slumped to 65.9 in July from 72.3 in June. The index matched the six-year low recorded in May.
The University of Michigan said the current economic conditions index also slid to 82.8 in July from 87.1 in the previous month.
“While the 3rd quarter GDP is likely to improve over the record setting 2nd quarter plunge, it is unlikely that consumers will conclude that the recession is anywhere near over,” Curtin said.
Curtin noted federal relief programs have prevented more substantial declines in consumer finances but warned a lapse of the special jobless benefits will directly hurt the most vulnerable.
On the inflation front, the report said one-year inflations expectations were unchanged from the previous month at 3.0 percent, while five-year inflation expectations inched up to 2.6 percent from 2.5 percent.