A monthly measure of consumer confidence has tumbled to its lowest level in more than two years as pessimism over business and labor conditions mounts.
The Conference Board reported that its Consumer Confidence Index fell nearly 15 points to 44.5 in August. That’s the lowest reading since the CCI retreated to 40.8 in April 2009.
Lynn Franco, director of the Conference Board Consumer Research Center, said the latest results of monthly surveys show consumers are “significantly” more pessimistic in their assessments of current conditions and their outlooks for the next six months.
“A contributing factor may have been the debt ceiling discussions, since the decline in confidence was well under way before the S&P downgrade,” Franco said. “Consumers’ assessments of current conditions, on the other hand, posted only a modest decline as employment conditions continue to suppress confidence.”
The Conference Board, a business research and membership group, bases the CCI on the results of monthly surveys conducted by the Nielsen Co. Economists closely monitor the index because consumer spending accounts for about two-thirds of economic activity in the country.
Assessments of current conditions pulled down the Present Situation component of the index more than two points to 33.5.
The proportion of consumers responding to the August surveys who described business conditions as “good” edged up two-tenths to 13.7 percent. But the share of those who called conditions “bad” rose nearly two points to 40.6 percent. The proportion of consumers who said jobs are “plentiful” slipped another four-tenths to 4.7 percent. The share of those who called jobs “hard to get” rose more than four points to 49.1 percent.
Consumers were less optimistic in their outlooks for the near future as well, driving the Expectations component of the index down 23 points to 51.9.
The share of consumers who expect business conditions to improve fell more than six points to 11.8 percent, while the proportion of those who anticipate worsening conditions rose more than eight points to 24.6 percent. The share of consumers who expect more jobs to become available fell more than five points to 11.4 percent, while the proportion of those who anticipate fewer jobs increased more than nine points to 31.5 percent.
The share of consumers who believe their incomes will increase fell nearly two points to 14.3 percent.