Business researcher Conference Board has taken its latest thermometer reading of the US consumer, and finds that a steady uptick in confidence has been reversed, and rather abruptly at that. The June Consumer Confidence Index lost almost ten points compared to May, dropping from 62.7 to 52.9.
The scale is tied to conditions as consumers experienced them in 1985, a state that is given a point value of 100. So consumers see much ground to gain back to get back to where they were 25 years ago.
Other readings were also down. The Present Situation Index dropped from 29.8 to 25.5, and the Expectations Index took a serious hit, dropping from 84.6 to 71.2.
CB’s Lynn Franco said, “Consumer confidence, which had posted three consecutive monthly gains and appeared to be gaining some traction, retreated sharply in June. Increasing uncertainty and apprehension about the future state of the economy and labor market, no doubt a result of the recent slowdown in job growth, are the primary reasons for the sharp reversal in confidence. Until the pace of job growth picks up, consumer confidence is not likely to pick up.”
Employment concerns may be driving pessimism, but the numbers relating to how consumers see hiring conditions are about the same month to month, though slightly worse. Those saying jobs are “hard to get” increased from 43.9% to 44.8%, and those saying jobs are “plentiful” decreased from a miniscule 4.6% to an even more miniscule 4.3%.
RBR-TVBR observation: We sense that consumers are correct. Until unemployment figures get to a much more manageable level, there is a very real danger of sailing right back into extremely choppy economic waters.