Consumer Sentiment declines sharply in July

The preliminary July Reuters / University of Michigan consumer sentiment index declined sharply to 63.8 from 71.5 in June.

In general consumer sentiment is a coincident indicator and is usually impacted by employment and gasoline prices. However, even with lower gasoline prices, consumer sentiment declined sharply – possible because of the heavy coverage of the debt ceiling charade.

This was well below the consensus forecast of 71.0 and definitely in the recession range.

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