Consumer Confidence Falls Amid Job Concerns
Consumer confidence fell in July from June’s 29-year high as Americans grew more concerned about their jobs, the Conference Board said Tuesday.
The Conference Board, a New York-based private research group, said its index of consumer confidence fell to 135.4 in July from a revised 138.2 in June, which was the highest reading since February 1969.
“Job uneasiness, a major factor in consumer confidence, helped push down consumer confidence in July,” said Lynn Franco, associate director of the Conference Board.
Nearly 15% of those surveyed this month said jobs were “hard to get,” up from 13.5% in June, the report said. About 12% said they feared jobs would be difficult to get in the next six months, up from 10%.
The index was slightly higher in July than the 135.9 Wall Street expected, but analysts said consumers remained in good shape overall after more than seven years of economic growth.
“The consumer sector remains strongly underpinned by rising real incomes, stable prices, low interest rates and a surge of wealth growth over the course of the expansion,” said Richard Kasmin, economist at Warburg Dillon Read.
In its report, the Conference Board said that despite the dip in confidence, consumers continue to be optimistic about current business conditions.
“While consumers are not expecting economic growth to accelerate, they are looking for business growth to continue through the remainder of 1998,” Franco said.
Nearly 45% of those surveyed rated current conditions as positive, up from 42% in June, while 9.6% described them as “bad” versus 9.8% in the previous survey, the report said.
More than 27% of those surveyed expected their family incomes to rise, up slightly from June. And the number of consumers who said they plan to buy a home, automobile or major appliance over the next six months rose in July.
Consumers fuel two-thirds of economic activity by buying goods and services, so changes in sentiment are closely watched by analysts and policymakers.
The Conference Board surveys about 5,000 households each month.
Bloomberg News and Reuters were used in compiling this report.