NEW YORK - The consumer confidence index sank to 44.5 in August from a downwardly revised 59.2 last month, The Conference Board reported Tuesday.
Economists polled by Thomson Reuters predicted the index would be 52.0.
The July index was originally reported as 59.5.
The present situation index dipped to 33.3 from an unrevised 35.7, while the expectations index plunged to 51.9 from a downwardly revised 74.9, originally reported as 75.4.
“Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook,” said Lynn Franco, director of The Conference Board's Consumer Research Center. “The index is now at its lowest level in more than two years (April 2009, 40.8). A contributing factor may have been the debt ceiling discussions since the decline in confidence was well underway before the S&P downgrade. Consumers’ assessment of current conditions, on the other hand, posted only a modest decline as employment conditions continue to suppress confidence.”
Business conditions were called “good” by 13.7% of respondents in August, up from 13.5% in July. Those saying conditions are “bad” climbed to 40.6% from 38.7%.
The percentage of consumers expecting a pickup in business conditions in the next half year fell to 11.8% from 17.9%, while 24.6% said they expect conditions to worsen, up from 16.1% the prior month.
On the jobs front, those who believe jobs are “plentiful” fell to 4.7% in August from 5.1% in July, while the number saying jobs are “hard to get” increased to 49.1% this survey from 44.8%. The respondents who see fewer jobs becoming available in a half year, grew to 31.5% from 22.2%. Those expecting more jobs to become available slipped to 11.4% from 16.9%, The Conference Board reported.
Income expectations were off, with 14.3% of consumers anticipating an increase in their income in the next six months, down from the prior month's 15.9%, while 18.7% expect their income to decrease, up from 16.9% in the prior month’s survey.
The number of consumers who expected to buy a home in the next six months slumped to 3.7% from 4.9%, while the number of respondents planning to buy a car grew to 12.9% from 11.9%. More consumers than last month said they plan to buy a major appliance in the next six months (50.1% vs. 47.7%).
More respondents than last month (46.8% vs. 42.0%) 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 23.5%-22.8% margin.
The consumer confidence survey is based on a probability design random sample by the Nielsen Company.
