U.S. consumer confidence dipped for the second consecutive month in August on concerns that an interest rate hike is upcoming, Bloomberg reported.
The report said University of Michigan's index of sentiment decreased to 92.9 from 93.1 in July, also below the 93.5 median forecast of economists polled by Bloomberg.
Reuters also noted that the consumer sentiment reading was the lowest since November 2014, despite showing that current economic conditions remain steady. It added that respondents also expect inflation to remain steady in the coming year and in the next five.
With a number of indicators showing the U.S. economy has amply recovered from the Great Recession, analysts are expecting the Federal Reserve to finally raise interest rates after holding this near zero for several years and this could affect growth.
Bloomberg, however, noted that while consumer sentiment was down, the survey showed the most positive outlook in the economy in 15 years. It pointed out that Americans have received a string of positive economic news such as declining gas prices and improving labor conditions. It noted that applications for unemployment benefits are at a four-decade low, while the unemployment rate in July stayed at a seven-year low of 5.3 percent.
Bloomberg added that sentiment is also improving among Americans in the bottom third of the income scale, who projected pay would rise 2.7 percent over the next year.
The report also said that 47 percent of respondents said their current financial situation had improved, but still lower a point lower than the highest level reached since the last recession began. Bloomberg added that nearly half of respondents said improving wages were the most important contributor to stronger finances, the highest since 2000.
The report said that although domestic developments are supportive of an improvement in sentiment there might be downside risks from ongoing international events such as the China's decision to devalue its currency.
