The Conference Board Consumer Confidence Index, which had increased moderately in July, posted a sharp decline in August. The Index now stands at 99.6 (1985=100), down from 107 in July. The Present Situation Index decreased to 123.4 from 134.2. The Expectations Index declined to 83.8 from 88.9 last month.
“Consumer confidence lost significant ground in August and is now at its lowest level this year,” says Lynn Franco, director of The Conference Board Consumer Research Center. “Less favorable business conditions coupled with a less favorable job scenario have resulted in the largest one month decline in confidence since Hurricane Katrina last year. Looking ahead, the glass remains half empty as consumers are growing increasingly more pessimistic about the short-term outlook.”
Consumers’ overall assessment of current conditions was significantly less favorable in August. Those claiming conditions are “good” decreased to 26.1 percent from 27.3 percent. Those claiming conditions are “bad” increased to 16.7 percent from 15 percent. Labor market conditions were also less favorable. Consumers saying jobs are “plentiful” decreased to 24.4 percent from 28.6 percent, while those claiming jobs are “hard to get” increased to 21.1 percent from 19.6 in July.
Consumers’ outlook for the next six months turned more negative in August. Those anticipating business conditions to worsen increased to 12.9 percent from 10.9 percent. Those expecting business conditions to improve edged down to 15.9 percent from 16.1 percent.
The outlook for the labor market was also less favorable. Those expecting more jobs to become available in the coming months decreased to 14 percent from 14.3 percent in July. Those expecting fewer jobs increased to 18.3 percent from 16.5 percent. The proportion of consumers anticipating their incomes to increase in the months ahead declined to 17.7 percent from 18.3 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, a research company. The cutoff date for August’s preliminary results was Aug. 22.