U.S. consumer sentiment sank in August as consumers lost confidence in lawmakers' ability to stave off the threat of another recession, a survey released Friday showed.
The Thomson Reuters/University of Michigan's consumer sentiment index edged up from its mid-August level but was still consistent with recession-era lows. The index has only been lower in three other surveys, which were taken in April and May 1980 and November 2008.
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The final August reading on the overall index of consumer sentiment was at 55.7, down from 63.7 the month before. It was slightly better than August's preliminary reading of 54.9, which had been the lowest level since May 1980.
Economists polled by Reuters had forecast a reading of 56.0.
"Consumers have shifted from being optimistic about the potential impact of monetary and fiscal policies to a sense of despair and pessimism about the role of the government," survey director Richard Curtin said in a statement.
Recent political wrangling over raising the U.S. debt ceiling appeared to take its toll. Spontaneous negative references to the government were made by 25% of respondents, above the prior record of 20% in April 2010.
The survey's barometer of current economic conditions was 68.7, down from 75.8 in July and below a forecast of 69.3. The component is at its lowest level since August 2009, just after the official end of the recession.
The outlook also worsened, with the gauge of consumer expectations falling to 47.4 from July's final reading of 56.0, but above an expected 45.7.
The survey's one-year inflation expectation rose to 3.5% from 3.4%, while the five-to-10-year inflation outlook held steady at 2.9%.