Confidence among U.S. consumers fell more than forecast in August as Americans paid higher prices at the gas pump, according to Bloomberg.com.
The University of Michigan’s preliminary index of consumer sentiment declined to 78.7 from 84.7 in July. The measure has averaged 88.1 since monthly data were first compiled in 1978.
The conflict in Lebanon, which drove energy prices higher, and news of a foiled plot to blow up airliners in London probably contributed to the decline in confidence, economists said. The report adds to signs of an economic slowdown that prompted the Federal Reserve to suspend its two-year campaign of interest-rate increases last week.
“More and more evidence is coming out that the economy is truly slowing,” Anthony Chan, chief economist at JPMorgan Chase & Co.’s private client services group in New York, said before the report. “You hope the Fed will stop in the very early stages or at least not do too much more.”
The Michigan index was expected to decline to 83.8 in August, according to the median estimate of 53 economists in a Bloomberg News survey. Forecasts ranged from 80 to 86.
The expectations index, which some economists view as an indicator of future consumer spending, declined to 64.5 from a July reading of 72.5.
A gauge of current conditions, which reflects Americans’ perceptions of their financial situation and whether it’s a good time to buy big-ticket items like cars, dropped to 100.8 from 103.5.
Consumers in the Michigan survey also aid they expect an inflation rate of 4.2 % in one year, up from 3.2% in the July survey.