Geopolitical Risks Hit US Consumer
Sober Look | Aug 17, 2014 12:25AM ET
Today's University of Michigan consumer sentiment report demonstrated how the current geopolitical uncertainty is impacting US consumers. The "Current Conditions" subindex is now at the highest level since the recession (beating forecasts), while the "Expectations" subindex declined sharply (worse than forecast). US consumers are feeling better about their current situation but have become increasingly jittery about the future.
While the current events in Eastern Europe and the Middle East are likely to have a smaller impact on the US than the EU, Americans have certainly become more cautious. It remains to be seen how much of this decline in sentiment will translate into weaker consumer spending. In the post-recession economic climate it doesn't take much for US households to pull back spending.
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