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  • Writer's pictureBBC Content Team

Consumer Sentiment Causing A Rapid Retail Relapse

Uncertainty has been a common theme radiating through the American public amid this incalculable pandemic. Therefore, it came to no surprise that the Delta Variant would throw a wrench even further into the already teetering economy. The Delta Variant is already causing an increasingly dramatic decline in consumer activity due to the overall ambivalence of this variant and the pandemic as a whole. To put this into perspective, the average consumer is so crucial in fueling the economy that a whopping 70% of all economic activity comes from the buying and purchasing of everyday Americans. This consumer activity is ever so vital in allowing the economy to grow (Pattidom). When retail sales and purchases start to decline due to the overall consumer sentiment amidst this variant, the entire economy falls victim to the economic repercussions.

As of this past July, economists have started to pay closer attention to the retail stocks and sales that have dropped very quickly. This drop may not have come as much as a surprise since the last two years have been full of unexpected economic changes, but it certainly came quite quickly compared to the retail stock and sale numbers in June 2021. According to the Dow Jones forecast at CNBC News, "Economists expect retail sales to fall by 0.3% in July, compared to a 0.6% gain in June." This drastic change from June to July is primarily due to the uncertainty and fear from the new Delta Variants and other strains of the Covid19 Virus. A study done at the University of Michigan found that the overall consumer sentiment and attitude towards the United States economy fell to the lowest level it has ever been since 2011. Their study similarly concluded the culprit of this retail relapse to be "concerns about Covid and the impact on the economy" (Pattidom). Some economists predict this situation could become even direr. Bank of America economists reported that they expect sales to continue to drop in large amounts, with a 2.3% month-over-month decline. These drastic decreases put an extreme amount of pressure on the overall economy and valuable consumers.

As retail sales and service stocks continue to decrease, experts take an even closer look at which economic areas in specific seem to be hurting from the economy's overall productivity. There are clear stats that show significant decreases in the regions of air travel, including hotels and transportation. The Delta Variant has made people more careful when traveling and exposing themselves and loved ones to highly populated and crowded areas. This is reflected in the data as most consumers take being cautious as an essential step in staying healthy and safe from this virus. Although there have been sharp declines in the retail portions of the economy, there have been some unexpected gains, such as the automobile industry, where sales grew 0.2% (Pattidom.). These areas will continue to be looked at closely in the months ahead.

Fortunately, there does seem to be a light at the end of the tunnel for our current economy. As forecasted by Senior economist at the Bank of America, Joseph Song, he believes there will be a significant bounce back with the anticipated back to school shopping for more children and families around America. As with most things in life, consumer sentiment is a fickle concept that can be changed within a short period of time. Every month that passes, the closer everyone gets to full economic recovery, a more normalized consumer sentiment, and a safer health environment.

Works Cited

Pattidomm. “Retail Sales Likely Dipped in July as Consumers Held off on Purchases amid Covid

Delta Worries.” CNBC, CNBC, 16 Aug. 2021,

likely-dipped- in-july- as-consumers-held-off-on-purchases.html.

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