YOUR MONEY : Consumer Confidence, Though Still High, Falls Slightly in July
Consumer confidence in the economy weakened slightly in July as Americans turned more pessimistic about business conditions and job opportunities, the Conference Board reported Tuesday.
Even so, confidence remains close to its highest level in four years, reflecting a continuation of the steady moderate growth that has characterized the U.S. economy in recent months, the research group said.
Its index of consumer sentiment eased to 91.6 this month from 92.5 in June. The index, calculated on a 1985 base of 100, is derived from responses to a questionnaire sent to 5,000 households nationwide.
“While consumers continue to grow more satisfied with ongoing conditions, their expectations for the immediate future have tapered off,” said Fabian Linden, executive director of the board’s Consumer Research Center.
“Still, the expectations component of the index, which has an impressive record as a leading economic indicator, suggests a continuation of steady moderate economic growth in the second half of the year,” he said.
The latest survey results show that about 17% of respondents expect business conditions to improve in the next six months, down slightly from the month before. Nearly 10% said conditions will worsen, up from 8% the month before.
As for employment, more respondents in the latest survey fear there will be fewer jobs available in the next six months. The number of those planning to buy an automobile rose in July after falling in June and May, but the number with plans to buy major appliances fell for the fifth straight month.
The Conference Board survey gauges consumer behavior patterns by asking questions on subjects that range from household buying plans to local job conditions. It is considered a useful barometer for measuring consumer willingness to borrow and spend. Consumer activity accounts for two-thirds of the nation’s economic activity.
Consumer Confidence
From a monthly survey of 5,000 U.S. households. Index: 1985 = 100. June 1994: 91.6
