Consumer confidence drops to five-month low
A measure of consumer confidence has dropped for a fourth straight month as the outlook for business and labor conditions for the second half of the year turns less optimistic.
The Conference Board reported that its Consumer Confidence Index (CCI) fell more than two points in June to 62, its lowest level in five months. While a separate measure of present conditions advanced in June, a measure of short-term expectations retreated.
“If this trend continues, spending may be restrained in the short-term,” said Lynn Franco, director of economic indicators at the Conference Board, a business research and membership group.
“The improvement in the Present Situation Index, coupled with a moderate softening in consumer expectations, signals there will be little change in the pace of economic activity in the near term,” Franco added.
The Conference Board bases the CCI on the results of a survey of U.S. households. Economists closely monitor the index because consumer spending accounts for more than two-thirds of economic activity in the country.
For June, more upbeat assessments of current business and labor conditions pushed up the Present Situation Index nearly two points to 46.6.
The share of consumers responding to the survey upon which the June CCI was based who described business conditions as “good” rose more than a point to 14.9 percent, although the proportion of consumers who said business conditions are “bad” edged up four-tenths of a point to 35.1 percent.
The share of consumers who said jobs are “plentiful” advanced three-tenths of a point to 7.8 percent, while the proportion of those who said jobs are “hard to get” rose six-tenths of a point to 41.5 percent.
A less upbeat outlook for business and labor conditions over the next six months pulled down the Expectations Index five points to 72.3.
The proportion of consumers who expect business conditions to improve in coming months fell more than a point to 15.5 percent, while the share of those anticipating worsening conditions climbed more than three points to 16.2 percent.
The outlook for the labor market was mixed. The proportion of consumers who expect more jobs to become available in coming months fell more than a point to 14.1 percent. But the share of those who believe there will be fewer job openings also fell — nearly a point to 20.6 percent.
Consumers were slightly less optimistic about the prospects for increased incomes — 14.8 percent expect their incomes to increase, down almost a point from May.