The deepest “employment slump of any recession in the last eight decades” has consumers convinced they’re about to lose their jobs — and that’s affecting consumer confidence, says Bloomberg.
Confidence among U.S. consumers fell in July for the first time in five months as mounting unemployment and depressed wages shook households.
The Reuters/University of Michigan final index of consumer sentiment decreased to 66, in line with forecasts, from 70.8 in June. A preliminary reading was 64.6.
So far, the economy has lost 6.5 million jobs and unemployment might reach 10% by the end of the year. Meanwhile, housing prices haven’t yet stabilized.
According to the article, consumers are saving their money and shopping at discount retailers such as T.J. Maxx, Marshalls, and 99 Cents Only Stores, while cutting back on eating out — even at fast food joints.
Yum Brands, the parent company of Taco Bell and Pizza Hut, cut its outlook for same-store sales growth this year.
Consumer Sentiment Index in U.S. Decreased in July (Update2) [Bloomberg]