The consumer confidence index dropped to 46.6 from an unrevised 49.3 last month, the Conference Board reported yesterday. Economists polled by Thomson Reuters had predicted the index would dip to 49.0.
The present situation index slid to 23.4 from an upwardly revised 25.0, originally reported as 24.8, while the expectations index fell to 62.0 from an unrevised 65.5 last month.
“Consumer confidence, which had rebounded strongly in late spring, has faded in the last two months. The decline in the present situation index was caused primarily by a worsening job market, as the percent of consumers claiming jobs are hard to get rose sharply,” said Lynn Franco, director of the board’s consumer research center.
“The decline in the expectations index was more the result of an increase in the proportion of consumers expecting no change in business and labor market conditions, as opposed to an increase in the percent of consumers expecting conditions to deteriorate further. However, more consumers are pessimistic about their income expectations, which does not bode well for spending in the months ahead.”
Business conditions were called “good” by 9.1% of respondents in July, an increase from 8.1%. Those saying conditions are “bad” rose to 46.3% from 45.3%.
The percentage of consumers expecting a pickup in business conditions in the next half-year fell to 18.0% from 20.9%, while 18.9% said they expect conditions to worsen, down from 20.4% in June.
On the jobs front, those who believe jobs are “plentiful” decreased to 3.6% in July from 4.59% in June, while the number saying jobs are “hard to get” increased to 48.1% from 44.8%. The respondents who see more jobs becoming available in a half-year slid to 15.0% from 17.5%. Those expecting fewer jobs to become available declined to 26.3% from 27.6%,.
Income expectations were pessimistic, with 9.5% of consumers anticipating an increase in their income in the next six months, off from June’s 10.1%, while 18.8% expect their income to decrease, up from 18.2% in the previous month’s survey.