U.S. Consumer Sentiment Drops on Delta Variant's Rise

Shallon Weis |

After a strong rally in consumer sentiment from the beginning of summer thanks to bottled-up frustration from the pandemic and excitement of summer's onset, consumer sentiment is falling again.

In a Bradford Financial Center survey launched in June 2021 about how consumers are spending our readers responded that they were purchasing online using money that was saved up over the pandemic, purchasing consumer goods, clothing, and making updates to their homes and wardrobes after a year of reduced spending. 

Consumer Spending August Numbers

Dampened now due to the case number spike due to the Delta variant of COVID-19, consumer spending has dropped according to a widely followed survey. Because this variant is more contagious than the initial COVID-19 it has spread rapidly. 

August survey results from the University of Michigan's consumer sentiment index dropped from 81.2 in July to 70.2 in August. This speaks to higher consumer volatility. 

The data suggest that this sentiment is as low as recorded levels in December 2011. Investors for a while have had the concern that a spike could threaten to disrupt the rise we've seen in economic activity. 

Understanding the Signals for Personal Investing

Whether the consumer spending data suggests future market volatility or that the markets may fall lower, it's times like these that Bradford Financial Center recommends working with a certified financial professional to help you formulate an investment strategy rather than being market-stress reactive. 

Consumer sentiment isn't always a perfect read on what spending will actually amount to. 

“Sentiment has given misleading signals on spending before and we think it will do again this time,” ING chief international economist James Knightley says.

But perhaps consumers will prove they have learned to live with outbreaks. This will likely continue to bode well for online purchases and purchases with online deliveries. Time will tell how the consumer responds to this next wave of COVID-19. 

Bradford's Watch and Manage (TM) service is a solution in volatile times to capture and gauge the pulse of the markets to buy and sell at opportune times. 

Contact Us to discuss how Bradford's Watch and Manage (TM) service could benefit your financial strategy.