The Conference Board’s Consumer Confidence Index, after a dip in July, declined again in August. The Index now stands at 93.5 (1985=100), down from 97.4 in July. The Present Situation Index declined from 99.4 in July to 92.0 in August. The Expectations Index dropped from 96.1 to 94.5.
“The Consumer Confidence Index is now at its lowest level since November 2001,” says Lynn Franco, Director of The Conference Board’s Consumer Research Center. “The month-to-month decline in the Present Situation Index is a strong signal that business conditions have yet to turn around. It also suggests that consumer spending is not likely to gain momentum any time soon. While consumer expectations are also down, they remain at levels that historically point to a continued, but slow, economic expansion.”
Consumers’ assessment of the present situation showed no improvement from July. Those rating business conditions as “good” fell from 20.2% in July to 16.6% in August. Those rating conditions as “bad” was virtually unchanged—22.3% in August, compared to 22.1% in July. Consumers reporting jobs were plentiful declined from 18.8% to 17.2%, but those claiming jobs are hard to get remained unchanged at 23.9%.
Consumers’ expectations for the next six months were mixed. While a greater percentage expected an improvement in business conditions in the coming months—20.8% in July versus 22.1% in August—a greater portion also held the opposite view.
The employment outlook was also less favorable. More consumers expect fewer jobs to become available, 17% in July, compared with 18.1% in August. About the same, 17.3% in July versus 17.5% in August, expect more jobs to become available. As for income prospects, 21.5% of consumers anticipate an increase, up from 20.1% last month.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by NFO WorldGroup, a member of The Interpublic Group of Companies.