Delta variant’s impact on the NJ economic bounce-back
With the Delta variant continuing to surge, there are new worries about the economic bounce-back as the consumer sentiment index drops to its lowest level since 2011.
According to Rutgers University economist James Hughes, the consumer sentiment index, which asks people about their personal finances, tumbled to 70.02 in its preliminary August reading, down from 81.2 in July.
“It’s a reflection of concern, optimism or lack of optimism about the economy and their personal situation,” he said.
Hughes said the sentiment index, which is measured by the University of Michigan, is a moment-in-time snapshot of how the public feels as the COVID numbers continue to go the wrong way.
“People are worried, they’re concerned about what’s going to happen, they lack some of the confidence that they had several months ago in the future of the economy,” he said.
At the same time, however, he noted the consumer sentiment index is not a perfect predictor.
“But it does give some suggestions on how consumers are going to behave: Are they going to spend, are they going to pull back,” he said.
Hughes pointed out the sentiment index certainly reflects a new level of uncertainty because things had started getting better in May and June.
Hughes said it was too soon to know what will happen next, and he stressed one month does not a trend make.
“If we have several months of plummeting confidence, plummeting sentiment, then I think there’s more concern for worry, but not yet,” he said