The consumer confidence index dropped to 50.4 in July, which was a larger decline than consensus had anticipated.
The consensus forecast was 51.0 according to Finviz and June’s reading was 54.3.
The Present Situation Index and The Expectations Index declined to 26.1 from 26.8, and 66.6 from 72.7 respectively.
Says Lynn Franco, Director of The Conference Board Consumer Research centre: “Consumer confidence faded further in July as consumers continue to grow increasingly more pessimistic about the short-term outlook. Concerns about business conditions and the labour 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.”
Consumers’ assessment of current conditions was more downbeat in July. Those saying conditions are “bad” increased to 43.6 per cent from 41.0 per cent, however, those saying business conditions are “good” increased to 9.0 per cent from 8.4 per cent. Consumers’ appraisal of the job market was also more negative. Those claiming jobs are “hard to get” increased to 45.8 per cent from 43.5 per cent, while those saying jobs are “plentiful” remained unchanged at 4.3 per cent.
Consumers’ short-term outlook also deteriorated further in July. The percentage of consumers expecting an improvement in business conditions over the next six months decreased to 15.9 per cent from 17.1 per cent, while those anticipating conditions will worsen rose to 15.7 per cent from 13.9 per cent.
Consumers were also more pessimistic about future job prospects. Those expecting more jobs in the months ahead decreased to 14.3 per cent from 16.2 per cent, while those anticipating fewer jobs increased to 21.1 per cent from 20.1 per cent. The proportion of consumers expecting an increase in their incomes declined to 10.0 per cent from 10.6 per cent.
So what continues to hammer sentiment? This: