Economy expands slightly, consumer confidence at lowest in months
Although the economy expanded more than expected in the second quarter—which means there was a slight increase in spending—consumer confidence is at its lowest since November 2011.
Real gross domestic product—which is the output of goods and services produced from labor and property—increased at an annual rate of 1.7 percent from the first to second quarter of the year, according to the U.S. Department of Commerce's Bureau of Economic Analysis.
That increase was slightly up from the initial advance estimate of growth, which was 1.5 percent.
"The increase in real GDP in the second quarter primarily reflected positive contributions from personal consumption expenditures, exports, nonresidential fixed investment and residential fixed investment that were partly offset by negative contributions from private inventory investment and from state and local government spending," according to the latest estimate from the Bureau of Economic Analysis. "Imports, which are a subtraction in the calculation of GDP, increased."
As the GDP rose slightly, consumer confidence fell, also according to CNN Money.
The Conference Board Consumer Confidence Index, which had increased in July, fell in August from 65.4 to 60.6.
The Expectations Index also declined from 78.4 to 70.5, and the Present Situation Index remained mostly unchanged at 45.8. It was 45.9 in July, according to The Conference Board.
"The Consumer Confidence Index is now at its lowest level since late last year," Lynn Franco, director of economic indicators at The Conference Board, said in a prepared statement.
"A more pessimistic outlook was the primary reason for this month's decline in confidence," she also said. "Consumers were more apprehensive about business and employment prospects but more optimistic about their financial prospects, despite rising inflation expectations. Consumers' assessment of current conditions was virtually unchanged, suggesting no significant pickup or deterioration in the pace of growth."
