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A key measure of consumer confidence has dropped to the lowest level since 1992, as U.S. consumers have become more anxious about their jobs and current business conditions.
The New York-based Conference Board said yesterday that its Consumer Confidence Index dropped to 57.2, the lowest level since October 1992, from a revised 62.8 in April.
Lynn Franco, director of the Conference Board Consumer Research Center, noted, "The Consumer Confidence Index now stands at a 16-year low (Oct. 1992, 54.6). Weakening business and job conditions, coupled with growing pessimism about the short-term future, have further depleted consumers' confidence in the overall state of the economy. Consumers' inflation expectations, fueled by increasing prices at the pump, are now at an all-time high and are likely to rise further in the months ahead. As for the short-term outlook, the Expectations Index suggests little likelihood of a turnaround in the immediate months ahead."
Consumers' appraisal of current conditions grew more pessimistic in May, according to the index. Those claiming business conditions are "bad" rose to 30.6 percent from 26.5 percent, while those claiming business conditions are "good" decreased to 13.1 percent from 15.4 percent last month. Consumers' assessment of the job market was also more downbeat. The percentage of consumers saying jobs are "hard to get" was virtually unchanged, 28.0 percent vs. 27.9 percent in April. Those claiming jobs are "plentiful" declined to 16.3 percent from 17.1 percent.
Consumers' short-term expectations weakened further in May. Consumers anticipating business conditions to worsen over the next six months increased to 33.6 percent from 27.4 percent, while those anticipating business conditions to improve increased slightly to 10.4 percent from 10.1 percent in April.
The index, which is based on a survey of 5,000 U.S. households conducted for The Conference Board by TNS, has now declined for five months in a row. The index uses 1985 as the benchmark year when the index stood at 100.