Apparently the high cost of gas along with a slumping housing market has begun to catch up with American consumers as for a fourth straight month the Consumer Confidence Index was in decline.
The New York-based Conference Board reported last week that the Consumer Confidence Index fell to its lowest level in almost a year. At the same time, the Commerce Department said that new home sales dropped in May for the fourth time in the past five months.
The New York-based Conference Board said that its Consumer Confidence Index fell almost 5 points to 103.9 in June, down from a revised 108.5 in May, reaching the lowest level since August 2006 when the reading was 100.2. Analysts had expected a reading of 106.
“A perceived softening in present-day business and employment conditions are the major reasons behind this month’s pullback in confidence,” said Lynn Franco, director of The Conference Board Consumer Research Center in a statement. “Looking ahead, consumers remain subdued about short-term economic prospects. All in all, the glass remains half empty and half full.”
The Present Situation, which measures how shoppers feel now about economic conditions, fell to 127.9 from 136.1 in May. The Expectations Index, which measures shoppers’ outlook for the next six months, edged down 87.9 from 90.1.
Economists closely monitor confidence since consumer spending accounts for two-thirds of all U.S. economic activity. We have reported that the nation’s retailers have had sluggish sales amid a weaker housing market and rising gasoline prices in this space over the last several months.
The Conference Board’s report includes a breakdown on exactly how U.S. consumers feel about the job market, a key contributor to the overall confidence index. Those saying jobs are “hard to get” inched up to 21.1 percent from 19.7 percent. Those claiming jobs are “plentiful” fell to 27.0 percent from 29.1 percent in May. Those expecting more jobs in the months ahead edged up to 14.0 percent from 13.6 percent, while those anticipating fewer jobs also increased to 17.0 percent from 15.6 percent.
