Consumer Confidence Stumbles as Labor Market Stagnates
Consumers weren’t as optimistic about economic recovery as analysts had assumed, a survey released Tuesday said. The Conference Board’s index of Consumer Confidence failed to build on its substantial gains in May, as overall sentiment retreated to 49.3 from a prior reading of 54.8. This is the first drop in sentiment since February.
Both components fell this month: The Present Situation index shrunk to 24.8 from 29.7, while the Expectations index declined to 65.5 from 71.5 in May.
“With the details of the report uniformly weak, we are left with the impression that this was an outright slump in consumer confidence during the month and not the result of weakness in any one particular subcomponent of the survey,” commented TD strategist Millan Mulraine.
In addition, consumer assessments of the job market continue to deteriorate as the unemployment rate approaches double-digits. Those stating jobs are “hard to get” increased to 44.8% from 43.9%, while only 4.5% of the population believe jobs are “plentiful.”
More broadly, those claiming business conditions are “good” decreased to 8.0% from 8.8%, while those saying conditions are “bad” increased to 45.6% from 44.5%.
As the second quarter comes to a close, only one-fifth of consumers are expecting business conditions to improve in the second half of the year, the report showed. For the jobs market, just 17.4% of people believe there will be more jobs on the market in the short-term, while those 27.3% believe there will be fewer jobs.
“Looking ahead,” Lynn Franco from the Conference Board said, “Expectations continue to suggest less negative conditions in the months ahead, as opposed to strong growth.”
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