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biggest monthly decline since 2012



Residents shop in a Walmart store in Orlando, Florida, on August 29, 2019.

Gerardo Mora | Getty Images

The University of Michigan's final consumer sentiment index was 89.8 in August, below the preliminary level of two weeks ago.

The index stood at 98.4 in July, the largest monthly decline. Refinquely surveyed economists forecast a consumer confidence level of 92.1 in August.

The decline is due to a turbulent month in the US-China trade war.

"Trump's tariff policy has been subject to repeated reversals in light of the threat of higher future tariffs, such tactics may prove useful in negotiations with China, but increase uncertainty and reduce consumer spending at home," said Richard Curtin, chief economist of the survey Consumers, announced in a press release.

President Donald Trump announced on August 1

that the US would impose tariffs on another $ 300 billion in goods imported from China. Tariffs were originally due to enter into force in September, but some were postponed or canceled until 15 December.

China announced last week to retaliate with new tariffs on US products and resume them for cars and car parts

The survey found that consumers who freely called tariffs are more likely to experience higher inflation and inflation expect rising unemployment. One in three consumers mentioned tariffs spontaneously, Curtin said.

"While overall sentiment is still in line with modest consumer spending, data has increased the likelihood that consumers will be knocked off the shelves in the coming months," Curtin said.

Get the market reaction here.


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