A monthly measure of consumer confidence has retreated from a five-year high, but still reflects a strengthening economy in the United States.
The Conference Board reported that its Consumer Confidence Index (CCI) fell nearly two points in July to 80.3. The month before, the index climbed at its highest level since it stood at 87.3 in January 2008.
Lynn Franco, director of economic indicators at the Conference Board, attributed the decline to weaker expectations for business and labor conditions, although the index remains well above the levels of a year ago. “Consumers’ assessments of current conditions continues to gain ground and expecations remain in expansionary territory despite the July retreat,” Franco said. “Overall, indications are that the economy is strengthening and may even gain some momentum in the months ahead.”
The Conference Board, a business research and membership group, bases the CCI on the results of monthly surveys of U.S. households.
Economists closely monitor the index because consumer spending accounts for more than two-thirds of economic activity in the country.
More upbeat assessments of current business and labor conditions pushed up the present situation component of the CCI nearly five points to 73.6.
The share of consumers responding to the survey upon which the July CCI was based who characterized business conditions as “good” rose 1.5 points to 20.9 percent. The proprtion of consumers who called businesses conditions “bad” fell four-tenths of a point to 24.5 percent.
The share of consumers who termed jobs “plentiful” increased nearly a point to 12.2 percent. The share of those who described jobs as “hard to get” decreased 1.6 points to 35.5 percent.
Consumers were slightly less upbeat in their outlooks, pulling down the expectations component of the CCI more than six points to 84.7.
The proportion of consumers who expect business conditions to improve over the next six months fell more than two points to 19.1 percent. But the share of those anticipating worsening conditions remained virtually unchanged at 11.2 percent.
The proportion of consumers who believe more jobs will become available fell more than three points to 16.5 percent. Those who forecast fewer jobs rose two points to 18.1 percent.