The Conference Board Consumer Confidence Index, which had surged in July, gave back all of the gain in August. The Index now stands at 105.0 (1985=100), down from 111.9 in July. The Present Situation Index decreased to 130.3 from 138.3 in July. The Expectations Index declined to 88.2 from 94.4.
“A softening in business conditions and labor market conditions has curbed consumers’ confidence this month. In addition, the volatility in financial markets and continued sub-prime housing woes may have played a role in dampening consumers’ spirits,” said Lynn Franco, director of The Conference Board Consumer Research Center. “But, despite less favorable conditions and in spite of all the recent turmoil, consumers still remain confident. And, current Index levels suggest further economic growth in the months ahead.”
Consumers’ assessment of present-day conditions in August was less upbeat than in July. Those claiming conditions are “good” decreased to 26.4 percent from 28.3 percent, while those saying conditions are “bad” increased to 16.3 percent from 14.5 percent. Consumers were also less positive in their appraisal of the labor market. Those saying jobs are “hard to get” increased to 19.7 percent from 18.7 percent. Those claiming jobs are “plentiful” decreased to 27.5 percent from 30 percent in July.
Consumers, once again, turned cautious in their short-term outlook. Those expecting business conditions to worsen in the next six months rose to 10.6 percent from 8.2 percent, while those anticipating business conditions to improve was virtually unchanged at 15 percent. The outlook for the labor market was also less favorable. The percent of consumers expecting more jobs in the months ahead declined to 13 percent from 13.8, while those anticipating fewer jobs increased to 15.3 percent from 14.9 percent. The proportion of consumers expecting their incomes to increase in the months ahead was virtually unchanged at 19.1 percent.
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 TNS.