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Conference Board: U.S. Consumer Confidence Falls 9% in July
Jul 29, 2015 9:05 AM
By Ronen Shnidman
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RAPAPORT... The Conference Board Consumer Confidence Index dropped to 90.9 in July from 99.8 in June (1985=100). The Present Situation Index slid to 107.4 from 110.3 in June and the Expectations Index declined sharply to 79.9 from 92.8 in June.
“Consumers continue to assess current conditions favorably, but their short-term expectations deteriorated this month,” said Lynn Franco, the director of economic indicators at The Conference Board. ”A less optimistic outlook for the labor market, and perhaps the uncertainty and volatility in financial markets prompted by the situation in Greece and China, appears to have shaken consumers’ confidence.”
Franco noted that the confidence index remained at levels associated with an expanding economy.
Consumers’ assessment of current conditions was somewhat less favorable in July. Those saying business conditions are “good” decreased from 26.1 percent to 24.2 percent. However, those claiming business conditions are “bad” was virtually unchanged at 17.9 percent.
Optimism among consumers regarding the short-term outlook decreased sharply in July. The percentage of consumers expecting business conditions to improve over the next six months declined from 17.9 percent to 14.7 percent, while those expecting business conditions to worsen rose slightly from 10.2 percent to 10.7 percent.
Consumers’ outlook for the labor market was less optimistic. Those anticipating more jobs in the months ahead decreased from 17.1 percent to 13.1 percent, while those anticipating fewer jobs increased from 15.2 percent to 20.0 percent.
Lindsey Piegza, the chief economist at Stifel Fixed Income, said that some decline in consumer confidence was expected at the start of the third quarter but not as sharp a fall as has occurred.
“Consumers are clearly losing confidence in a more robust outlook for the U.S. economy amid growing concerns over stagnant business conditions, fewer jobs, and declining income,” she said. “As consumers lose confidence, they are more likely to tighten their purse strings, further restraining household spending. As a consumer-based economy, without the consumer happy and healthy, we have little hope of stability, let alone momentum, as we head further into the second half of the year.”
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Tags:
conference board, consumer confidence, outlook, Ronen Shnidman, U.S. consumers
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