The consumer confidence index slumped to a five-month-low of 50.4 in July, as it deteriorated more than economists expected from a June reading of 54.3, the Conference Board reported Tuesday.
The June level was revised upward from an originally reported 52.9. Economists polled by Thomson Reuters predicted the index would slip to 51.0 in July. The reading was the lowest since confidence plunged to 46.4 in February.
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.
“Consumers continue to grow increasingly more pessimistic about the short-term outlook,” said Lynn Franco, director of the Conference Board’s consumer research center. “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 of 8.4% from June. Those saying conditions are “bad” rose to 43.6% from 41.0%.
The percentage of consumers expecting better business conditions the next six months slid to 15.9% from 17.1%, while 15.7% said they expect conditions to worsen, up from 13.9% in June.
“Assessments of the job market seem to be influencing confidence,” Michael Moran, chief economist at Daiwa Securities America, said in a research note.