Consumer Sentiment Slips Further In August
Consumer sentiment continued its downward slide in August. The Conference Board Consumer Confidence Index decreased last month following an earlier decline in July. It now stands at 84.8, down from 91.7 in July.
The Conference Board’s Present Situation Index, based on consumers’ assessment of current business and labor market conditions, decreased sharply in August from 95.9 to 84.2. Its Expectations Index, based on consumers’ short-term outlook for income, business and labor market conditions, declined from 88.9 in July to 85.2 in August.
“Consumer Confidence declined in August for the second consecutive month,” says Lynn Franco, senior director of economic indicators at The Conference Board. “The Present Situation Index decreased sharply, with consumers stating that both business and employment conditions had deteriorated over the past month. Consumers’ optimism about the short-term outlook, and their financial prospects, also declined and continues on a downward path. Consumer spending has rebounded in recent months, but increasing concerns amongst consumers about the economic outlook and their financial well-being will likely cause spending to cool in the months ahead.”
The Conference Board reports that consumers’ assessment of present-day conditions receded in August. The percentage claiming business conditions are “good” declined from 17.5 percent to 16.4 percent, while those claiming business conditions are “bad” increased from 38.9 percent to 43.6 percent. Consumers’ appraisal of the job market also grew less favorable. The share saying jobs are “plentiful” declined from 22.3 percent to 21.5 percent, while those claiming jobs are “hard to get” increased from 20.1 percent to 25.2 percent, more than one-fourth of consumers.
Consumers were also more pessimistic about the short-term outlook. The Conference Board notes that the percentage of consumers expecting business conditions to improve over the next six months declined from 31.6 percent to 29.9 percent, while those expecting business conditions to worsen increased slightly from 20.2 percent to 20.5 percent. Consumers’ outlook for the labor market was also less positive. The share expecting more jobs in the months ahead declined from 29.6 percent to 29.1 percent, while those anticipating fewer jobs increased from 21.3 percent to 21.9 percent. Regarding their short-term income prospects, the percentage of consumers expecting an increase declined from 14.8 percent to 12.7 percent, while the proportion expecting a decrease rose from 15.8 percent to 16.6 percent.