NEW YORK — Consumer confidence, based on their assessment of current economic conditions and their expectations for the short-term, fell in August, reversing forward progress in June and July.
The Conference Board Consumer Confidence Index for August fell to 106.1 from July’s 114 revised number. The Present Situation Index, which is based on consumers’ assessment of current business and labor conditions, dipped to 144.8 from 153. Meanwhile the Expectations Index, based on the short-term outlook for income, business and labor, declined to 80.2, keeping it just above the 80 mark, which typically signals a recession within a year’s time.
“August’s disappointing headline number reflected dips in both the current conditions and expectations indexes,” said Dana Peterson, chief economist for The Conference Board. “Write-in responses showed that consumers were once again preoccupied with rising prices in general, and for groceries and gasoline in particular. The pullback in consumer confidence was evident across all age groups,” said Peterson, who noted confidence held steadiest among those in the $50,000 to $99,999 household income range.
Some of the factors behind the dip, said Peterson, were “few consumers said jobs are ‘plentiful’ and more said jobs are ‘hard to get.’ Hard data confirm that employment gains have slowed, overall wage increases are less generous compared to a year ago and the average number of weeks of unemployment is ticking upward.”
As for expectations for the next six months, the drop to the near-recession threshold of 80, said Peterson, reflects “less confidence about future business conditions, job availability and incomes. Consumers may be hearing more bad news about corporate earnings, while job openings are narrowing and interest rates continue to rise, making big-ticket items more expensive.”
The monthly Consumer Confidence Survey is based on an online sample and is conducted for The Conference Board by consumer insights and market research company Toluna.