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The Conference Board Consumer Confidence Index(TM), declined to 46.6 (1985=100) in July, down from 49.3 in June. The June index, in turn, was lower than that measured in May. Additionally, in July, the Present Situation Index fell from 25.0 in June to 23.4 in July, and the Expectations Index declined to 62.0 in July from 65.5 in June.
The Consumer Confidence Survey(TM), which is conducted monthly for The Conference board by New York-based market research company TNS, is based on a representative sample of 5,000 U.S. households.
“Consumer confidence, which had rebounded strongly in late spring, has faded in the last two months,” said Lynn Franco, director of The Conference Board Consumer Research Center in New York. “The decline in the Present Situation Index was caused primarily by a worsening job market, as the percent of consumers claiming jobs are hard to get rose sharply. The decline in the Expectations Index was more the result of an increase in the proportion of consumers expecting no change in business and labor market conditions, as opposed to an increase in the percent of consumers expecting conditions to deteriorate further. However, more consumers are pessimistic about their income expectations, which does not bode well for spending in the months ahead.”
Consumers continued to rate current conditions unfavorably in July. Those saying business conditions are “bad” rose to 46.3 percent from 45.3 percent, although those saying conditions are “good” edged up to 9.1 percent from 8.1 percent. Consumers’ assessment of the labor market deteriorated further, however, with those claiming jobs are “hard to get” increasing to 48.1 percent from 44.8 percent, and those claiming jobs are “plentiful” decreasing from 4.5 percent to 3.6 percent.
Overall, consumers in July were pessimistic about the economy’s short-term outlook, according to The Conference Board, though some glimmers of hope were apparent. The percent of consumers expecting business conditions to improve over the next six months fell to 18.0 percent from 20.9 percent, but those expecting conditions to worsen declined to 18.9 percent from 20.4 percent.
The labor market outlook was also mixed, the survey found. The percentage of consumers anticipating more jobs to be available in the months ahead fell to 15.0 percent from 17.5 percent, although those expecting fewer jobs declined to 26.3 percent from 27.6 percent. The proportion of consumers expecting their incomes to increase decreased to 9.5 percent from 10.1 percent.