This morning, the Conference Board, a New York-based research group, reported that consumer confidence eased in June, posting a reading of 62.0 for the month. That is below the revised May figure of 64.4. (Earlier, the May confidence index had registered a reading of 64.9.) Expectations had been that June would see a survey result of 63.5.
This, moreover, was the fourth month in a row that this closely watched survey had fallen, having earlier posted readings of 71.6 in February, 69.5 in March, 68.7 in April, and the aforementioned 64.4 in May. The weaker stock market was likely one reason for the latest setback. More fundamental, however, is the poor job market. Consumers simply are fearful of the kinds of commitments that would suggest confidence is building. This reluctance to make material commitments is reflected in the still dour readings on the housing front, where progress is being measured in small increments--at best.
In addition to the aggregate result, we saw a mild pickup in the present situations index, where a June reading of 46.6 was posted. That was up from May's 44.9. On the other hand, going forward, expectations are less hopeful, as confidence over the next six months dropped sharply from 77.3 to 72.3. This latter index is normally higher than the composite score, as people tend to be more upbeat that things will get better down the road, even if they are not better just yet.
Meanwhile, those seeing jobs as plentiful, edged up slightly this month, rising from a minuscule 7.5% to 7.8%. However, Americans stating that jobs were difficult to get increased from 40.9 to 41.5. The latter change is not dramatic, to be sure, but the direction is not encouraging.
Essentially, the findings note that the consumer mood is souring at this time, as anxiety about the near-term outlook ticks higher. “If this trend continues, spending may be restrained in the short term.” This summation comes from Lynn Franco, the director of economic indicators at the Conference Board. Essentially, with readings so similar to those of the prior month, the conclusion would seem to be that spending will not deviate much in the months to come. That is a cautionary indicator for the economy as a whole, and especially so for some key sectors, such as housing, retailing, and autos. This also implies that employers will not be pushing hard to swell the ranks of the employed. With the jobless rate still stuck at 8.2%, that is not a positive indicator. Last week's decision by the U.S. Federal Reserve to extend its so-called Operation Twist is an acknowledgement that the situation is still troubled at home, albeit much less so than in Europe, where recessions are spreading across the Continent.
Overall, then, this was one more in a series of underwhelming reports. In all, this report, and most of those preceding it, suggest that the nation's economy will expand by little more than 2% in the quarters to come.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.