Consumers still do not feel positive about the state of the U.S. economy. In the latest monthly poll by the Conference Board, the Consumer Confidence Index™ for June stood at 49.3 points, calculated from a baseline of 100 points set in 1985. The measure was 51 points in June 2008. The Present Situation Index stood at 24.8 points, down from 65.4 points one year ago. The Expectations Index improved to 65.5 points from only 41.4 points 12 months ago.
Lynn Franco, director of the Conference Board Consumer Research Center, said, "After back-to-back months of strong gains, consumer confidence retreated in June. The decline in the Present Situation Index, caused by a less favorable assessment of business conditions and employment, continues to imply that economic conditions, while not as weak as earlier this year, are nonetheless weak. Looking ahead, Expectations continue to suggest less negative conditions in the months ahead, as opposed to strong growth."
Consumers who believed that business conditions at present are "bad" accounted for 45.6 percent of respondents, up from 44.5 percent one month ago. Those who stated jobs were "hard to get" increased to 44.8 percent from 43.9 percent in May. Consumers who anticipate improving business conditions during the next six months fell to 21.2 percent from 22.5 percent in May, and those who expect conditions to deteriorate further rose to 20.2 percent from 18 percent.
According to diamonds.net, the annual world wealth report produced by Capgemini and Merrill Lynch found that the world's population of high net worth individuals contracted to pre-2005 levels. This segment of the population, comprising 8.6 million individuals who own a total of $32.8 trillion in assets, lost 19.5 percent of its wealth in 2008. High net worth individuals were defined as those with at least $1 million in financial assets, excluding collectibles and residences.
Lifestyle spending, which includes the jewelry category, by high net worth individuals was significantly reduced in 2008. However, wealthy people did gravitate toward buying art and jewelry as investments, actually increasing their investment in these categories beyond their pre-recession levels, primarily as an additional means of "flight to safety," the report concluded.
Luxury collectibles, such as automobiles, yachts and jets, accounted for the largest portion of these "investments of passion" in 2008, at 27 percent. Individuals in Japan and in North America allocated the most funds to this category than those in any other region. The jewelry segment grew to become the third-largest passion investment in 2008, with 22 percent. High net worth investors in Asia and the Middle East allocated the most to jewelry, gemstone and watch investments.
Within the lifestyle spending category, purchases of luxury consumables fell 43 percent worldwide. Sixty percent of those in North America said they spent less on luxury consumables in 2008.
