Report: Consumer Sentiment Plunges from Debt Ceiling Debate Aug 10, 2011

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The August Consumer Reports Index, a measure of overall consumer sentiment, fell to its lowest level since December 2009 and registered its sharpest drop in two years.

“The debt ceiling debate in Washington focused the consumer’s attention fully on the dire state of the economy, leaving many in a dispirited mood,” said Ed Farrell, director of the Consumer Reports National Research Center. “Americans are facing real financial difficulties due to weak employment, which is a key impediment to an economic recovery. This is reflected in nearly every measure of the consumer’s experience.”

Consumer Reports' Index fell to 43.4, down sharply from 48.5 in July 2011. The figure represents the percentage of people saying they were financially better off versus worse off than they were a year ago.

A bright spot on the index was the Past 30-Day Retail Index, reflecting July activity, which was 12.0, up from 10.2 the month earlier. Improvements from July to August in the Past 30-Day Retail Index came from gains in small appliances (22.0% up from 15.9%), major home electronics (13.3% up from 10.1%), and personal electronics (22.8% up from 20.6%).

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