Industry News

Gas prices erode consumer confidence

Americans fear inflation, more unemployment
Published on Aug 26, 2005

Consumer confidence fell sharply in August due to the surge in gasoline prices, according to the latest Survey of Consumers by the University of Michigan. "Consumers have found it increasingly difficult to cope with the recent surge in gasoline prices as their required budget cutbacks escalated each time they filled their gas tank," according to Richard Curtin, the director of the University of Michigan's survey. The unusually large August decline was widespread among all demographic groups and across all regions of the country. "Consumers anticipated higher inflation, higher interest rates, higher unemployment and a slower pace of economic growth during the year ahead," Curtin said. Although consumers did not anticipate a recession during the year ahead, they were more likely to expect an economic downturn sometime during the next five years. The index of consumer sentiment was 89.1 in the August 2005 survey, down from 96.5 in July and 95.9 in August of 2004. Only 10 monthly su...

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