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Delta variant is making consumers pull back on their spending

 Part 1. Vocabulary

skittish

/ˈskidiSH/ adj.

-  (of people and animals) nervous or easily frightened

You've probably seen skittish horses in parades — the loud noises and crowds of people make them very nervous and jumpy. 

 

mobility

/mōˈbilədē/ n.

- the ability to move or be moved freely and easily:

"Exercise helps retain mobility in the damaged joints"

 

index

/ˈinˌdeks/ n.

- an indicator, sign, or measure of something:

"Exam results may serve as an index of the teacher's effectiveness"

 

discretionary

/dəˈskreSHəˌnerē/ adj.

- available for use at the discretion of the user:

"Rules are inevitably less flexible than a discretionary policy"

 

winding down

/ waɪnd ˈdau̇n/ v. phrase

- To cause something to slow and near an ending.

Things will begin to wind down at the end of the summer.

 

rebound

/ˌriːˈbaʊnd/ v.

- to return to an earlier and better condition; improve:

Older athletes find it harder to rebound from injuries.

 

 

Part 2. Article Reading

Consumers are feeling more skittish about their spending, with new data on consumer sentiment reflecting “the least favorable economic prospects in more than a decade,” according to the University of Michigan’s August survey, which recorded one of the sharpest ever plunges in the survey’s history.

The headline index figure of 70.3 reflected a 13.4 percent drop from the previous month, down 5.1 percent from a year earlier.

“It wasn’t a total surprise, but… we think it primarily reflects the reality set in that the pandemic is not, in fact, over, and there's significant uncertainty regarding where things are going from here,” said Garrett Nelson, senior equity analyst at CFRA Research.

“The surge of the delta variant has started to impact how comfortable consumers feel being out in public,” said Greg McBride, chief financial analyst at Bankrate. A drop in people’s mobility and willingness to engage in activities outside the home could distort where, how and to what extent they spend their discretionary income. McBride said economists are most likely to see this hesitancy reflected in a pullback in service-sector purchases like plane tickets and restaurant meals.

Some already see manifestations of more cautious consumption in recent data. Retail sales for July disappointed, falling 1.1 percent — about three-quarters of a percentage point higher than expectations — with especially sharp declines in cars, clothes, and sporting goods, according to the Commerce Department.

Retail spending this fall could be further constrained by the winding down of the emergency unemployment insurance programs that provided fiscal stimulus and financial support to millions of jobless Americans, Nelson predicted. “We do think that will have a significant negative impact, but it will be mitigated somewhat by the child tax payments,” he said.

“The delta variant is still the biggest near-term risk for retail spending, and if we see a rebound in eCommerce because of it and consumers staying away from stores, that's going to really hurt retailers,” Nelson said since in-store sales yield higher margins than their digital counterparts. [By Martha C. White]

Read full article https://www.nbcnews.com/business/business-news/delta-variant-making-consumers-pull-back-their-spending-new-data-n1277817

 

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