August consumer sentiment drops to 3-year low
Consumer sentiment in the U.S. plunged to the lowest level in three years according to a Thomson Reuters/University of Michigan survey. The final August reading on the survey fell to 55.7 from 63.7 in July and up slightly from the initial 54.9, which was the lowest since May 1980. The survey interviews 500 households each month to gauge consumer attitudes about the economy. Federal Reserve Chairman Ben Bernanke addressed concerns about consumer sentiment in his economic update from Jackson Hole, Wyo. In a speech that highlighted the need for Congress to enact a sustainable economic policy to grow jobs and restore the housing sector, Bernanke said recent market turbulence is tied to declining consumer confidence in the U.S. "Bouts of sharp volatility and risk aversion in markets have recently re-emerged in reaction to concerns about both European sovereign debts and developments related to the U.S. fiscal situation, including the recent downgrade of the U.S. long-term credit rating by one of the major rating agencies and the controversy concerning the raising of the U.S. federal debt ceiling," Bernanke said. "It is difficult to judge by how much these developments have affected economic activity thus far, but there seems little doubt that they have hurt household and business confidence and that they pose ongoing risks to growth," he added. Write to: Kerri Panchuk.