NEW YORK - The consumer confidence index slumped to 50.4 in July from an upwardly revised 54.3 last month, The Conference Board reported this morning.
The June index was originally reported as 52.9.
Economists polled by Thomson Reuters predicted the index would be 51.0.
The present situation index slipped to 26.1 from an upwardly revised 26.8, originally reported as 25.5, while the expectations index decreased to 66.6 from an upwardly revised 72.7 last month, originally reported as 71.2.
“Consumer confidence faded further in July as consumers continue to grow increasingly more pessimistic about the short-term outlook,” said Lynn Franco, director of The Conference Board's Consumer Research Center. “Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves. Given consumers’ heightened level of anxiety, along with their pessimistic income outlook and lackluster job growth, retailers are very likely to face a challenging back-to-school season.”
Business conditions were called “good” by 90% of respondents in July, an increase from 8.4% the prior month. Those saying conditions are “bad” rose to 43.6% from 41.0%.
The percentage of consumers expecting a pickup in business conditions in the next half year slid to 15.9% from 17.1%, while 15.7% said they expect conditions to worsen, up from 13.9% the prior month.
On the jobs front, those who believe jobs are “plentiful” stayed at 4.3% in July, while the number saying jobs are “hard to get” increased to 45.8% this survey from 43.5%. The respondents who see more jobs becoming available in a half year, fell to 14.3% from 16.2%. Those expecting fewer jobs to become available jumped to 21.1% from 20.1%, The Conference Board reported.
Income expectations improved, with 10.0% of consumers anticipating an increase in their income in the next six months, off from the prior month's 10.6%, while 17.5% expect their income to decrease, up from 16.8% in the prior month’s survey.
The number of consumers who expected to buy a home in the next six months dropped to 1.9% from 2.0%, while the number of respondents planning to buy a car grew to 4.5% from 4.1%. More consumers than last month said they plan to buy a major appliance in the next six months (28.5% vs. 23.7%).
Fewer respondents than last month (36.5% vs. 38.3%) 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 19.5%-17.8% margin.
The consumer confidence survey is based on a representative sample of 5,000 U.S. households for The Conference Board by TNS.
