Conf. Bd. Aug. Confidence Index Falls to 60.6

The consumer confidence index dropped to 60.6 in August from a downwardly revised 65.4 last month, The Conference Board reported Tuesday.

The July index was originally reported as 65.9. The August level is the lowest reading since last November.

The present situation index slid to 45.8 from a downwardly revised 45.9, originally reported as 46.2, while the expectations index fell to 70.5 from a downwardly revised 78.4, originally reported as 79.1.

Economists polled by Thomson Reuters predicted a 65.9 reading for the index.

"The consumer confidence index is now at its lowest level since late last year (Nov. 2011, 55.2)," said Lynn Franco, director of The Conference Board's Consumer Research Center. "A more pessimistic outlook was the primary reason for this month's decline in confidence. Consumers were more apprehensive about business and employment prospects, but more optimistic about their financial prospects despite rising inflation expectations. Consumers' assessment of current conditions was virtually unchanged, suggesting no significant pickup or deterioration in the pace of growth."

Business conditions were called "good" by 15.2% of respondents in August, up from 13.7% in July. Those saying conditions are "bad" held at 34.4%.

The percentage of consumers expecting a pickup in business conditions in the next half year slid to 16.5% from 19.0%, while 17.7% said they expect conditions to worsen, up from 15.1% the prior month.

On the jobs front, those who believe jobs are "plentiful" fell to 7.0% in August from 7.8% in July, while the number saying jobs are "hard to get" decreased to 40.7% this survey from 41.0%. The respondents who see fewer jobs becoming available in a half year, increased to 23.4% from 20.6%. Those expecting more jobs to become available slumped to 15.4% from 17.6%, The Conference Board reported.

Income expectations were mixed, with 15.7% of consumers anticipating an increase in their income in the next six months, up from the prior month's 14.2%, while 16.8% expect their income to decrease, up from 14.9% in the prior month's survey.

The number of consumers who expected to buy a home in the next six months rose to 5.3% from 4.6%, while the number of respondents planning to buy a car decreased to 11.6% from 14.3%. Fewer consumers than last month said they plan to buy a major appliance in the next six months (48.1% vs. 48.3%).

More respondents than last month (46.7% vs. 41.9%) expect to take a vacation in the next six months, but more said they would stay in the U.S. rather than leave the country. Cars rather than airplanes were the preferred mode of travel, by a 26.6%-21.0% margin.

The consumer confidence survey is based on a probability design random sample by the Nielsen Company.

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