The Money Anxiety Index predicted the unexpected drop in consumer confidence in its release on August 7, when it warned that consumers feel more financially anxious and less confident due to uncertainty over the economic conflict with Russia. On Friday August 15, the Thomson Reuters/University of Michigan's Consumer Sentiment Index came in at 79.2, substantially lower than the median forecast of 82.5 projected by economists polled by Reuters, and down from the final reading of 81.8 in July.
The release by the Money Anxiety Index (www.moneyanxietyindex.com) on August 7 stated that After a promising second quarter, the Money Anxiety Index is trending upwards signaling an increase in the level of financial anxiety and lower consumer confidence as a result of economic uncertainty over the conflict with Russia. The August preliminary Money Anxiety Index increased to 72.7 after ending the second quarter with 71.6.
Consumers' financial concerns and the subsequent increase in their level of money anxiety are already substantiated by the latest development surrounding the conflict with Russia. Last week Russia announced boycott of U.S. produce for one year which totals $1.3 billion. Additionally, Europe, which is a critical market for the U.S. is starting to crumble economically with Italy leading the way falling back into a recession after experiencing two consecutive quarters of declining GDP.