How are consumers feeling about the economy?
It’s been quite a week for economic news. We found out that home prices shot up astronomically, and Fed Chair Jerome Powell thinks the economic recovery is on track and growth is strong, at 6.5% annualized in the second quarter.
So how are consumers feeling? Well, it could be better. There’s been a sharp decline in consumer optimism over the past three weeks.
“This fall corresponds perfectly with the rise in delta variant across the U.S.,” said Jesse Wheeler at polling firm Morning Consult.
Wheeler said that consumers are worried the resurgence of COVID-19 will make general business conditions worse rather than their own finances.
“The decline in sentiment is driven by reading the news, the increase in cases, more than a direct impact on their wallets,” he said.
Fear of COVID-19 and increased restrictions could drive some to pull back from in-person shopping and services.
“There’s no question that the Delta variant presents the No. 1 risk in the near-term for retailers,” said Garrett Nelson, who follows the industry at CFRA Research.
“The businesses that would suffer the most would be the small businesses, some of who just barely survived, as well as the mall-based retailers,” he said.
Those businesses have benefited the most from consumers going out to spend money again, Nelson said.
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