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Consumer Confidence Down After 3 Months of Increases

Posted by Editor on June 28, 2019
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The Conference Board Consumer Confidence Index declined in June following increases in the three prior months. The Index now stands at 121.5 down from 131.3 in May.

The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – decreased from 170.7 to 162.6. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – decreased from 105.0 last month to 94.1 this month.

“After three consecutive months of improvement, Consumer Confidence declined in June to its lowest level since September 2017,” says Lynn Franco, senior director of economic indicators at The Conference Board. “The decrease in the Present Situation Index was driven by a less favorable assessment of business and labor market conditions.”

In talking about the decline in expectations over the next six months, Franco says, “The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence. Although the Index remains at a high level, continued uncertainty could result in further volatility in the Index and, at some point, could even begin to diminish consumers’ confidence in the expansion.”

Current conditions

Consumers claiming business conditions are “good” decreased from 38.4% to 36.7%; however, those saying business conditions are “bad” also decreased, from 11.7% to 10.9%.

Consumers’ assessment of the labor market was also somewhat less upbeat. Those saying jobs are “plentiful” decreased from 45.3% to 44.0%, while those claiming jobs are “hard to get” rose from 11.8% to 16.4%.

Short-term outlook

The percentage of consumers expecting business conditions to be better six months from now decreased from 21.4% to 18.1%, while those expecting business conditions will worsen rose from 8.8% to 13.1%.

Consumers’ outlook for the labor market was also less favorable. The proportion expecting more jobs in the months ahead decreased from 18.4% to 17.3%, while those anticipating fewer jobs increased from 13.0% to 14.8%.

Regarding their short-term income prospects, the percentage of consumers expecting an improvement decreased from 22.2% to 19.1%, while the proportion expecting a decrease inched up from 7.8% to 8.0%.

The monthly Consumer Confidence Survey is based on a probability-design random sample and conducted for The Conference Board by Nielsen. The cutoff date for the preliminary results was June 14.

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