The preliminary reading on August consumer sentiment from the University of Michigan was released this morning, and it was a major disappointment. The headline reading peaked back in April but this month’s preliminary reading collapsed down to the lowest level since December 2011. That decline has been attributed to concerns over the Delta variant.  As shown in the second chart below, the 11 point drop from 81.2 at the end of July to 70.2 today was the largest decline between two reports (either the preliminary and the prior final report or the final report and the preliminary reading) since the preliminary reading in April of 2020. The April 2020 reading was the largest drop on record at 18.1 points.  Before that, October 2008 was the next largest and last double digit decline.

Not only was the release dramatically worse than the last update, but it was a huge miss relative to expectations.  Using data from our Economic Indicators Database, today’s release came in 11 points below expectations.  The only other month going back to at least 1999 that even comes close was a 9.9 point miss in the preliminary reading in February 2004.  Click here to view Bespoke’s premium membership options.

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